China's Yashili New Zealand Dairy Co has entered into a
conditional agreement to buy industrial land for a proposed
infant milk formula plant at Pokeno in Waikato.
The company is waiting for Overseas Investment Office (OIO)
approval to proceed with the $210 million project that
includes purchase of industrial land and construction and
working capital for a processing plant on a newly-created
industrial park at the northern end of the Waikato
expressway, Guangdong-based Yashili said in a statement.
Upon completion, the plant will produce up to 52,000 tonnes
of finished and semi-finished milk product annually.
In January Yashili and China's biggest dairy company, Yili,
unveiled plans to invest in building processing plants in New
Zealand. Yili will spend $214 million in establishing an
infant formula plant in South Canterbury as a result of its
planned takeover of Oceania Dairy group.
Yashili said its New Zealand plant was planned for
commissioning in the second half of 2014.
Yashili is one of China's biggest producers, distributors and
marketers of infant milk formula for its domestic market. Its
products are sold under the Yashili, Scient and Merla brands
in just over 105,000 retail outlets in China.
The company has imported milk powder from New Zealand for
over 10 years and has used New Zealand milk powder
exclusively in its infant milk formula since August 2010.
In the Chinese market, Yashili has promoted the high quality
of New Zealand-sourced milk content in its premium brands and
associated its products, the company's New Zealand operations
manager Terry Norwood said.
"We therefore see that it is a logical step for Yashili to
further position its premium brands alongside New Zealand's
strong, positive environmental profile, its reputation for
technical excellence, and its efficient management systems by
investing in a manufacturing operation to this country," he
Norwood said the company's move had been encouraged by the
Chinese Government's decision to substantially reduce import
tariffs on finished milk formula.
"This decision, in turn, has been in response to the
country's rapidly growing demand for infant milk formula,
driven by a large rural-urban shift, a stable birth rate,
more mothers going out to work, and increases in disposable
Yashili New Zealand Dairy Company will be providing local
employment for 100 people, he said.
Norwood said that Yashili's interest in New Zealand will be
wholly concentrated on manufacturing.
"As a newcomer to the New Zealand dairy processing sector we
want this project to be seen internationally as a working
model for future successful investment in the country's
dairying industry, where we add value to both local and
imported ingredients for products for the export market,"
He said further information would made available once the
purchase was approved by the Overseas Investment Office.