The plant will allow Westland to separately process (segregate) multiple types of special quality milks into high value products to meet growing global and domestic demand, which the company says will return more money to shareholder farmers and the regional economy.
Chief executive Toni Brendish says segregated production of speciality milks is a key component of Westland’s five-year strategy.
“Westland needs to reduce its dependency on bulk dairy commodities with their volatile pricing cycles,” Brendish said.
“We’ll do this by expanding our capacity to produce high value products, differentiated by the special qualities of the milk used to make them. This will include A2 milk and our new Ten Star Premium Standard milk. There is also potential, in later stages of the project, for other segregated products such as grass-fed, pure Jersey, goat or sheep milk, or even plant-based nutrition.”
Operational for 2019-20
Brendish said the investment allows the company to bring forward development of its segregation capacity.
The new plant will also allow the cooperative to produce high value segregated product even during the peak milk season.
“Currently, while we can produce some segregated product on the shoulders of the season, at peak our existing plant capacity forces us to process low value bulk commodities just to get the milk volume through,” she added.
The plant will be operating in time for the 2019-20 season. It will create an additional eight to 10 jobs at Hokitika.
“Westland Milk Products is already a key economic driver of the West Coast economy,” Brendish said.
“Dairy generated more than 14.3% in gross domestic product in the region in 2016 alone and 9.2% of the region’s workforce are directly employed staff (shareholder farmers and their employees are additional).
“However, we do face challenges to our objective of delivering our shareholders a competitive and sustainable payout that ensures their future, and the future of dairying in our region.
“We simply can’t compete in the bulk dairy commodities arena where we have little influence or control over the vagaries of the global dairy trade, and a reduced ability to ride out its highs and lows. If Westland is to thrive, and grow our vital contribution to the West Coast economy, we must focus on our best assets, including our heritage, location, people and, particularly, our smaller size, with the agility and flexibility that comes with that.”
She added some specialized staff are likely to be attracted to the region by the requirements of the new plant, and Westland’s skills development program means these skills will be passed on to existing staff and new people coming through, benefiting the West Coast generally.