$100m Fonterra dairy plant planned

BY MARTA STEEMAN

Fonterra's proposed $100 million dairy factory near the township of Darfield could expand fourfold as dairying grows in Canterbury through irrigation schemes.

The dairy giant yesterday announced it wanted to build a new plant near Darfield in Canterbury – its first greenfields plant in 15 years.

Fonterra trade and operations manager Gary Romano said Fonterra was looking to secure enough land to expand the site, from an initial processing plant with the capacity to process 2.2 million litres of milk a day to a site capable of processing 10 million litres a day "at some point".

"Canterbury is the fastest-growing dairying region in New Zealand. It is now producing about 15 per cent of the country's milk for export and growing at a rate of more than 5 per cent annually," he said.

At present Fonterra collects milk by tanker from Culverden in North Canterbury south to its Clandeboye factory near Timaru.

Clandeboye and the huge plant at Edendale in Southland are the two big plants in the South Island. If Darfield secures consent it will be the third.

Romano said the site was about 5 kilometres from Darfield. Fonterra had bought a few small farms and had an option on a larger site with a plentiful water supply from a water bore for a factory. The farms collectively covered about 600 hectares.

The plant would probably cost a bit over $100 million, although final costings had not been done. That did not include the cost of the land and establishing infrastructure on the site.

"While it's still early days, we expect the development would create more than 50 new permanent jobs, on top of the work the construction of the plant would provide for local businesses."

The controversial irrigation schemes in Canterbury – Central Plains Water scheme and the Hurunui Water project – only "indirectly" influenced Fonterra's view on the area's dairying potential, Romano said.

The company was yet to decide whether the new plant would process milk into milk powder or into nutritional milk powders.

The company would now start discussing its plans with the community. It was only in the early stages of planning, Romano said.

Fonterra had not yet applied for consents.

The company had been in contact with local farmers in the area and local authorities.

"It is overwhelmingly seen as a positive development in the local community," Romano said.

The consenting process would provide the opportunity to hear a full range of views, he said.

The consenting process would be "significant" because consents would be required for several activities.

Selwyn Mayor Kelvin Coe said the plan was "exciting" for the region.

"It's good that Fonterra has confidence in the district," he said.

"Most of our growth has been concentrated around Rolleston, so it's nice to some new employment opportunities up in the Darfield area."

Rival dairy plant Synlait at Dunsandel, about 30km away, said it would not expect any impact on its business.

Managing director John Penno said Fonterra's view lined up with Synlait's view that dairying would continue to grow in Canterbury. Producing nutritional milk powder – infant milk formula – seemed a sensible decision as well, Penno said.

"If anything we see it validating what we are doing. We don't see it as a threat," he said.

Synlait had never seen itself as growing in size to dominate milk processing in the area. Fonterra was a large player collecting milk from many farmers in the area already.

Rakaia farmer and vice-president of the dairy section of Federated Farmers, Willy Leferink, said "This is incredibly good news for farmers, the town of Darfield, Canterbury and New Zealand as a whole."

Canterbury members of Federated Farmers were welcoming the news, he said.

Darfield was an ideal hub and close to the Port of Lyttelton.

"If the consultation is successful and we hope it will be, this plant will be absolutely state-of-the-art built to best practice from the ground floor up."

- © Fairfax NZ News