All systems go for Oceania
There is light at the end of the tunnel for the Glenavy-based Oceania milk factory in terms of production and staffing.
Oceania chief executive Aidan Johnstone said the company is delighted with how production is going.
"We have produced the first lot of milk. The quality seems to be fine," he said.
The factory is in the midst of a 12-week final testing stage before construction hands over to production in mid-September.
The first six weeks of tests consisted of putting water through the machines. It is now in the commissioning stage and using milk.
Although some milk commodities are now being produced, it is still a testing period, Johnstone said.
"We will be producing a significant amount of product during the final stage, however it is not all necessarily going to China."
The plant will primarily be producing an ingredient for infant formula but there would also be secondary milk commodities, all for the Chinese market, he said.
Chinese company Inner Mongolia Yili Industrial Group has owned the dairy factory since April last year.
Despite its Chinese ownership, Johnstone said no relationships had been developed with Chinese-owned farms in New Zealand.
"We have nothing to do with Chinese-owned farms and we have absolutely no plans for farm investment in New Zealand," he said.
Johnstone said the company is undergoing a final recruitment drive which will bring staffing levels up to 70 at the plant. There are now 65 employees.
A total of 48 suppliers have signed contracts with Oceania for the supply of 170 million litres in the 2014-15 season.
There were a few reasons for choosing to supply milk to Oceania over local company Fonterra, Johnstone said.
"We pay 10 cents a litre more than Fonterra. Farmers do not need to invest in shares [unlike Fonterra], which means less debt for investment or further investment into farming."
The dairy company is the largest in Asia and 10th largest in the world, which gave stability for demand, he said.
At full capacity, the Glenavy processing plant will be capable of processing 300 million litres of milk per year, generating 47,000 tonnes of milk powder.
The Timaru Herald