8 Aug 2017

Gore milk plant attracts strong interest

6:20 pm on 8 August 2017

A new infant formula plant near Gore has five times as many farmers trying to sign up than it needs.

An aerial photo of the Mataura Valley Milk Company plant under construction on July 29, 2017.

An aerial photo of the Mataura Valley Milk Company plant under construction on July 29. Photo: Supplied

The $240 million Mataura Valley Milk company plant is being built in Southland and is on track to be up and running by August next year.

State-owned China Animal Husbandry Group has a 72 percent share in the business and farmers own a 20 percent stake in the company.

The plant will process about 500,000 litres of whole milk a day and expects to turn out 30,000 tonnes of infant formula a year.

General manager Bernard May said farmers in the region were keen to supply the new company.

"We probably got four or five times the amount of interest than what we can actually offer [in terms of] contracts and shareholder supply.

"There's been a lot of interest, particularly the fact they're supplying milk into a nurtitional dedicated infant formula business, versus into a typical commodity dairy plant."

The farmers putting their hand up have current contracts with other dairy companies.

"They're either supplying Fonterra, Open Country or other suppliers in the region ...

"We only need in the vicinity of 25 to 30 farmers, and that's why we've got a lot more interest than what we have places for people to invest."

Mataura Valley Milk's supply manager  Dave Yardley and general manager Bernard May.

Mataura Valley Milk's supply manager Dave Yardley and general manager Bernard May. Photo: Supplied

There's no figure for what farmers could be paid, but Mr May said it's in line with other nutritional companies.

"We're able to pay a superior payment for that milk, so we're currently working with our suppliers and various experts to come up with the right formula for our farmers.

"It's likely to be a guaranteed milk price with a premuim and a range of incentives that will incentivise the farmer to produce the right quantity of milk to us and also to provide milk year round."

He said a supplier handbook will include some fairly stringent requirements and this will help define who makes the grade as a Mataura Valley Milk supplier/shareholder.

At the moment about 160 workers are on site building the plant, and this will peak in the next few months to between 320 and 350 people.

Mr May said he is aware of some issues in the community because the size of the project is straining resources such as tradespeople and accommodation.

"It has been a struggle to everyone and get all those tradies accommodated within the region... Clearly we're working with everyone in the community, we've actually had very good support from the community.

"We've been careful to make sure when we tender jobs the tradie is actually able to do the work in the time frame and not over-commit to other commitments they have in the region."