An infant formula milk powder plant is to be built near Balclutha in Otago.
Brent Sutton, owner of Auckland-based global supplier of food and dairy products, the Sutton Group, and Dunedin-based dairy farmer Grant Paterson have teamed up to form Gardians, the group behind the plant.
American-based SPX Corporation has been contracted to build the facility and the technology needed to convert fresh milk into powdered products.
All milk will be supplied to the plant by Grant Paterson's herd of 11,500 cows around the region.
The group is releasing few details about the new plant, but says it will export the formula to emerging markets including India and Asia.
A spokesperson says the plant will be in use next year, employ about 40 staff and produce about 20,000 tonnes of formula a year.
Dairy co-operative Westland Milk Products has announced it will set up a new paediatric nutritional manufacturing plant in Hokitika.
Chief executive Rod Quin says the company is moving from being a commodity milk powder producer into higher value products.
He says this may help to close the payout difference between it and its largest competitor for raw milk supply, Fonterra.