Another dairy company is being started in the lower South Island to provide competition for Fonterra.
Former Meridian Energy chief executive Keith Turner will chair the New Zealand Milk Company, which he says is looking to establish a niche milk-processing facility.
He says there is interest from farmers and the company hopes to offer them more value for their product.
Dr Turner says the company will be shareholder-owned and built around the idea of having farms and processing units in a single enterprise.
He will not say where the factory and farms will be located, only that it is the lower South Island and they hope to have it operational by 2011 or 2012.
The former Reserve Bank Governor and National Party leader Don Brash is a director of the company.