The new $214 million South Canterbury dairy factory is set to be commissioned in time for the start of the new dairy season, with the creation of 70 permanent jobs.
The plant, at Glenavy between Timaru and Oamaru, is expected to be commissioned by May or June, and will produce milk powder for export to China, where it will be used to produce infant formula.
The company which owns the plant, Oceania Dairy Ltd, is a wholly-owned subsidiary of Inner Mongolia Yili Industrial Group (Yili), China's largest dairy company.
The majority of new staff are expected to be recruited locally.
Oceania Dairy has signed its first milk supply agreement, with factory neighbours and local dairy identities Aad and Wilma van Leeuwen. The agreement represents a group of foundation suppliers covering 20 individual dairy farms.
Oceania chief executive Aidan Johnstone said the company was delighted to have contracted Mr and Mrs van Leeuwen as the first suppliers for the new plant.
"They are industry leaders and excellent farmers," he said.
"They typify the sort of suppliers that we are looking to work with."
Mr van Leeuwen said the group was proud to be the inaugural suppliers to the company.
"South Canterbury boasts some of New Zealand's largest and most productive dairy farms, run by progressive farmers," he said.
"Oceania Dairy, with a world-class processing plant and strong ownership structure, offers farmers choice and opportunity.
"This is a real shot in the arm for the local economy."
Oceania will contract up to 40 farmers for the 2014-15 supply season, to deliver 130 million litres of milk.
As the factory moves to full production capacity by 2016-17, it will process 300 million litres per year, generating 47,000 tonnes of powder for export.
According to Mr Johnstone, local Oceania suppliers will enjoy the long-term support of a significant international dairy company.
"Oceania's milk suppliers have the security of knowing that they are contributing to a first-class product being provided to a substantial and progressive single end-user client," he said.
"That provides suppliers with security and confidence to invest in their businesses."
Waimate mayor Craig Rowley said it was good to hear Oceania Dairy has secured its supply.
"We are keen to see as many as possible of the new staff recruited locally and will also welcome those people who are moving from other areas to take up employment at the site," he said.
"It is excellent news for Waimate and the wider districts."
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