Oceania Dairy has signed the first milk supply agreement for
its $214 million dairy factory in Glenavy.
The agreement was signed with large-scale local dairy farmers
Aad and Wilma van Leeuwen, representing a group of foundation
suppliers covering 20 individual dairy farms.
The plant is being built for Chinese company Inner Mongolia
Yili Industrial Group and is on target for completion in time
to take milk in August next year.
Oceania Dairy will contract up to 40 local farmers for the
2014-15 supply season to deliver 130 million litres of milk.
Once it moved to full production capacity by 2016-17, it
would process 300 million litres a year, producing 47,000
tonnes of milk powder for export to China to be used in
The company offered local farmers choice and opportunity and
was a ''real shot in the arm'' for the local economy, Mr van
The latest factory update said Oceania Dairy had 11 staff,
with the number expected to ''ramp up rapidly'' in the new
Mid Canterbury milk processor Synlait Milk says it is
expecting to outperform financial targets on the basis of a
''favourable product mix''.
International dairy commodity price differentials were larger
than usual and continued to favour Synlait's milk powder and
anhydrous milk fat-dominant product mix, chief executive John
While it was still early in the season, recent announcements
also made it clear that the current season's milk price was
likely to be less than the company had expected, Dr Penno
Earlier this week, Fonterra announced it was leaving its
forecast milk price unchanged at $8.30 and slashing its
dividend by 22c.
The board attributed its decision to the disparity between
very high milk powder prices and those for cheese and casein.
Although it had devoted the maximum possible volume of milk
to milk powder streams this season, it had not been able to
lift production above the present 70% level as it was limited
by its production facilities.