Major investment to create value added dairy plant

Major investment to create value added dairy plant

· Mataura Valley Milk announces new nutritional powders manufacturing plant, valued at about $200m, in Southland
· Involves significant investment partner - China Animal Husbandry Group
· 20% of company to be held by Southland dairy farmer suppliers
· Investment will create at least 100 new jobs

28 July 2016: Mataura Valley Milk today announced a new nutritional powders manufacturing plant, valued at about $200m, will be built in McNab, north of Gore. The new plant will create at least 100 new jobs, grow added value dairy exports, and inject significant income into the Southland economy.

Gore resident and Mataura director Aaron Moody says the plant is designed to tap into the growing global demand for nutritional powders, especially infant formula.

“The global infant formula market was worth $57b in 2013, and the market in China alone is expected to reach $38b by 2017.

“The appetite for nutritional powders is huge with China’s imports of infant formula growing by 51% in the 12months to February 2016. Importantly, the price for infant formula and growing up milk powders is less reliant on the global commodity dairy price,” he said.

The state-of-the-art pharmaceutical standard plant will produce infant formula, ultra-high temperature (UHT) cream and small amounts of skim milk powder, using locally sourced raw milk for global markets.

“As part of our gate to plate supply chain strategy, many of these products will be canned and distributed by BODCO, a Hamilton based dairy business with a world class pharmaceutical-grade blending and packaging facility. BODCO is also a minority shareholder in Mataura Valley Milk.”

Mr Moody welcomed the cornerstone investment in Mataura Valley Milk by China Animal Husbandry Group (CAHG), which will hold 71.8% of the equity.

“The relationship with China Animal Husbandry Group, provides us the confidence to proceed with the plant and excellent access to the rapidly growing demand in the Chinese market,” Mr Moody said.

“At the same time, twenty per cent of the company will be held by Southland dairy farmers who have the ability to meet Mataura’s raw milk and quality requirements, enabling them to be part of a value added business operating at the premium end of the market.”

The remainder of the company is held by BODCO (5.6%) and predominantly New Zealand investors.

Mr Moody also acknowledged “the very supportive and constructive relationship we have had with the Gore District Council throughout the planning phase of this project”.

The New Zealand directors of the business include prominent Southland farmer and former Mayor of Gore, Ian Tulloch (alternate, Aaron Moody) and Hamilton-based businessman Gary Mollard who has considerable dairy sector experience.

Construction of the Mataura plant is expected to commence in October 2016.

China Animal Husbandry Group’s investment in Mataura Valley Milk was approved by the New Zealand Overseas Investment Office as well as the Chinese Government.

ENDS

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