Westland Milk eyes infant formula expansion

05:41, Nov 29 2013
Rod Quin
LOOKING FOR OPPORTUNITIES: Westland Milk Productions chief executive Rod Quin has revealed a nutritional dryer was the next stage in West Coast dairy co-operative's growth plan.

The West Coast's dairy co-operative has made the first move to invest $100 million in an infant formula dryer at Hokitika and will begin investigations into building a plant to make long-lasting milk products at Rolleston.

Westland Milk Products' board has approved $2m to take the 3.9 tonnes an hour dryer to the next stage, which should see it through the resource consent process by February.

Subject to consents being granted, building of the new dryer is expected to start in April and it will be commissioned in August 2015.

The Rolleston plant for ultra-heat treatment (UHT) products is only at the planning stage.

Westland chief executive Rod Quin said the nutritional dryer was the next stage in Westland's growth plan. The company was continuing to develop its capacity as a supplier of high-end nutritional products and relied less on selling bulk ingredients.

"Prospects for the dairy industry worldwide, and in New Zealand in particular, are for continued growth with increased demand, especially from China,'' he said.

"Westland is well placed to fit with the new regulatory market in China and demand for our nutritionals capacity is already accelerating."

Westland made good progress during the 2012-13 season in improving use of the plant by growing milk supply and offering year-round supply, Quin said.

The farmer-owned co-operative entered new markets with new value-add products.

Farmer shareholders supported changes to the co-operative's constitution at an annual meeting this week with directors no longer restricted to ward representation. Director terms will increase from three to four years.

New independent director Keith Smith will replace David Spence who served 12 years in the role on the board. Directors' remuneration was increased to bring it closer to industry levels.

Westland is making progress on its new $23m boiler at Hokitika which is ahead of schedule. When completed it will remove the risk of energy supplies being disrupted and provide savings.

Westland set a daily milk peak on November 17 when 3.69 million litres was collected from farms.

The co-operative is expected to produce and sell 122,000 tonnes of milk products for more than $750m in revenue in the 2013-14 season. The payout forecast remains at $7.60 to $8 a kilogram of milksolids before retentions.

It will be recalculated in December when more contracts are completed and foreign exchange cover is in place.