Russian ownership likely

BY ALAN WOOD

A Russian-owned group hopes to raise its stake in Waimate-based New Zealand Dairies to 100 per cent but says further capital investment in the Studholme dairy factory is on hold due to the global downturn.

New chief executive for Nutritek Group Jim Dwyer says full ownership is on the cards, but dependent on talks with shareholders.

Moscow-based Nutritek last year took its stake in NZDL up to 82 per cent.

Dwyer was part of a visiting delegation of overseas owners, including Nutritek chairman George Sazhinov, who also plan to discuss future investment in the New Zealand Dairy industry at local and ministerial level.

They will meet with Finance Minister Bill English, Trade Minister Tim Groser, and Agriculture Minister David Carter. "I'll be doing a lot more listening than I'll be doing talking in the next few days," Dwyer said of the upcoming meeting.

A decision on a further investment of up to US$100 million in the Studholme plant to provide a further milk dryer would hopefully be made at the end of the year, Dwyer said.

"Expansion plans are on hold for now until a clear assessment can be made in response to global financial turmoil.

"There is no commitment to that at this point in time but ... we are in a sound position and looking for plans for the future to strengthen our links with the Asia Pacific region."

Nutritek calls itself the biggest overseas investor in the New Zealand dairy industry having laid out more than NZ$100m, and has government permission and the ambition to increase its NZDL stake to 100 per cent.

"We are very interested to increase our stake," Dwyer said. Timing of such a move was under discussion.

Dwyer said his focus in the corporate world was as a "consumer goods marketeer" and a turnaround specialist.

In Nutritek's case he would concentrate on branding, bringing a focus to the group's employee resource and building relationships with farmer-suppliers.

"It is one of the critical aspects of what will drive our business as we move forward, building those relationships and it's one of the reasons I'm here," he said.

Nutritek used the raw exports from Studholme to develop complex baby food and clinical food dairy products, marketed into Europe under the Nutrilak brand and into parts of Asia under the NuGold brand for infant milk formula and NuGrow for "growing up" formula.

So far in the 2009 calendar year, the factory had processed 136 million litres of milk for 21,000 tonnes of finished product, up 30 per cent from the same period a year earlier.

The Asian brands were being reviewed as to their suitability for the markets of Vietnam, Indonesia and China.

Dwyer, originally from Jerseyville, Illinois, has spent much of the last 22 years in Russia, as well as spells in the US, Britain and Holland.

The move to work with Nutritek was made easier through existing business relationships with Sazhinov, and Constantine Malofeev, who also has a stake in Nutritek.

"The opportunity of building a legend brand based on the extremely high quality of New Zealand dairy as a rule is a very favourable aspect of the business," Dwyer said.

- © Fairfax NZ News