Fonterra's Lichfield expansion could generate hundreds of jobs for South Waikato and signal a major investment in the district's future.
The estimated $300 million upgrade to the dairy company's plant involves installing a new milk powder drier and could be a ticket to full-time employment for 50 people on completion but around 800 during its construction phase.
The major development has been in the pipeline for months but Fonterra recently submitted a resource consent to the South Waikato District Council to move ahead with the project.
The expansion would have to be tested against the rules of the Resource Management Act before it could be approved but South Waikato mayor Neil Sinclair said he would be surprised if the project did not go ahead and said it would be a "major investment" for the district and the industry.
"It's a recognition of the dairy industry here."
Fonterra Central Waikato operations manager Julio Rodriguez said labour and contractors would be sourced from the district.
He said there was no way to put an exact figure on the total cost of the project but compared it to Christchurch's Darfield dryer.
The D2 dryer at Darfield is the largest milk powder dryer in the world.
"To have a development like this at my facility is exciting, a 4.5 million litre drier is just fantastic," Rodriguez said.
The project is yet to gain approval from Fonterra's head of directors but he said there had been positive response from every direction.
Farmers, council representatives, employees and shareholders attended a meeting in Tokoroa to hear a briefing on the proposal.
The meeting revealed there were a few environmental and traffic concerns.
But Rodriguez said resolving any potential traffic issues would be the centre of Fonterra's attention and made assurances that systems were already in place to handle environmental problems including a waster water plant.
Councillor and dairy farmer Herman van Rooijen said the upgrade would improve the dairy industry.
"Over the season just gone, Fonterra was unable to process milk into the highest-paying product," he said.
And that product was milk powder. "It's a huge thing for South Waikato and farming,"he said.
His only concern was the lengthy process of gaining consent.
"It's adding a huge cost, sometimes you've got to think ‘do we really need this?'," he said.
Lichfield dairy farmer Colin Haigh said the site was "ideal" to build on because it was a green site.
Haigh agreed with van Rooijen about the benefits for dairy farmers across the nation and said it would benefit the district as well in terms of employment.
Fonterra has had a site at Lichfield for 20 years.
The proposed expansion is part of Fonterra's plan - announced in its latest interim results - to spend $400 million to $500m on capital investments over the next three years.
This follows recent Fonterra investments around the country.
A $120m plant at Waitoa became operational early this year, and is expected to be fully completed in July or August.
Construction has also started at a $200m to $250m expansion of Fonterra's Pahiatua plant in Manawatu.
- Waikato Times