Synlait Pokeno processes milk as company gets ESG linked loan
The news comes as Synlait has entered into a four-year NZ$50m (US$31.3m) Environmental, Social and Governance (ESG) linked loan with ANZ. This is the first loan in New Zealand that encourages a borrower to further improve its reporting performance against a set of independent ESG criteria.
Synlait Pokeno’s nutritional spray dryer has the capacity to produce 45,000 metric tonnes (MT) of product. The facility, like Synlait Dunsandel, will be capable of producing a full suite of nutritional, formulated powders (including infant-grade skim milk, whole milk and infant formula base powders).
The facility will initially produce infant-grade ingredients while regulatory registration is obtained for infant formula base powder production.
Synlait CEO, Leon Clement, said, “Pokeno is a highly sophisticated facility being run by an engaged and highly capable team, backed by some of the Waikato’s best dairy farmers. This first milk run is a significant milestone for our team who are putting Synlait’s newest nutritional spray dryer through its paces.
“Our team bring skills from a variety of backgrounds and industries, including engineering, food technology, dairy and infant formula. Forty five percent of our manufacturing team live within 15 kilometres of the Synlait facility.”
The company is currently recruiting an additional 22 roles as Synlait Pokeno increases its capability to manufacture infant formula over the coming months.
“Our expansion into the Waikato is in direct response to increased customer demand and diversifies risk away from our single site at Dunsandel, Canterbury. We look forward to working with our staff, milk suppliers, the local community and industry in the region,” Clement said.
Synlait ESG-linked loan
The Synlait loan will effectively transfer ANZ’s existing NZ$50m committed four year revolver loan into an ESG Linked Loan. A discount or premium to the base lending margin is applied. The performance is based on Sustainalytics’ ESG Risk Ratings, an assessment of a company’s exposure to financially material ESG risks, measured annually. Sustainalytics prepare ratings for over 11,000 companies and are widely used in Europe to assess risk ratings on companies implementing ESG-linked loans.
Synlait CFO, Nigel Greenwood, said, “For Synlait, linking our financial arrangements to our ESG performance made perfect sense. It reinforces to our shareholders and stakeholders that we are committed to continuously improving our performance and disclosure, and aligns with our company purpose, which is to do milk differently for a healthier world.”
ANZ head of sustainable finance, Katharine Tapley, said, “Synlait’s strong commitment to sustainable business practices made it an ideal candidate for this type of financing. We are excited to have partnered with Synlait to secure New Zealand’s first ESG-linked loan as we jointly showcase that ESG initiatives can deliver material financial benefits.”