Synlait is spending $15 million to produce lactoferrin - a key ingredient in baby formula.
Lactoferrin is a new product for the Canterbury-based dairy company, which will make the powder in a spray dried form - one of only two companies in the world to do so.
The other is in Europe and owned by FrieslandCampina.
Synlait says its product will be much finer than other New Zealand and Australian lactoferrin products which tend to be freeze dried with particles that are difficult to dissolve.
Chief executive John Penno also said Synlait has received resource consent to build a new packaging plant at Dunsandel.
He said the company is still working through the tender process and would not disclose the cost.
However, Dr Penno said the plant would employ 50 extra personnel and have 20,000 tonnes of capacity per annum.
He said the timing was right for the latest venture.
Dr Penno said the company has been working for some years to take a big position in infant formula and it has invested heavily in plant, equipment and people.
He said Synlait has also invested in market development and made good progress in terms of securing a number of key customers, particularly in China.
