Two South Island-based milk processors have announced
further expansion plans involving investments totalling more
than $200 million.
Westland Milk Products has a resource consent application
lodged with the Westland District Council to build a $102
million nutritionals drier on its Hokitika site, which also
includes new batching equipment, high specification mixing
equipment, additional warehousing, another laboratory and a
25kg packing line.
The company was confident consent would be granted with
conditions to meet any concerns about noise, traffic and air
discharge, chief executive Rod Quin said.
The investment would create up to 36 new jobs in Hokitika and
allow the company to produce an additional 23,000 tonnes of
nutritional product each season.
The company's board has approved funding for the project from
a combination of debt and retentions. It was expected to be
commissioned in August next year and generate sales of $115
million a year when at full capacity.
Meanwhile, Mid-Canterbury-based Synlait Milk, which yesterday
announced it had nearly doubled its net profit for the half
year to January, is expanding the scope of some of its growth
initiatives at its Dunsandel site and bringing forward some
The company's second large-scale infant formula spray drier
would now have 25% greater capacity than originally planned,
while the board had also committed $6 million of additional
expenditure to prepare the site for an eventual fourth
large-scale spray drier.
Combined with the extra capacity, it would increase the
estimated cost of the project from $103.5 million to $135
million, managing director Dr John Penno said.
Synlait Milk posted a $12.1 million net profit for the
six-month period, up $5.3 million on the previous
Revenue increased from $176.4 million to $284.9 million,
largely due to sustained high international commodity prices,
chairman Graeme Milne said.
A $7.2 million increase in gross profit was due to strong
earnings from its milk powder and cream products.
That was partially offset by lower than expected earnings
from its infant formula and nutritional products business due
to regulation changes in China and Fonterra's precautionary
recall of whey protein concentrate, and an expectation the
annual average foreign exchange rate would be higher than
applied in the determination of the farm gate milk price.
That resulted in the forecast 2014 full-year net profit to be
revised from a range of $30 million to $35 million, to a
range of $25 million to $30 million, which was still ahead of
the prospectus forecast of $19.8 million, Mr Milne said.
Fonterra has begun construction this week on its first
blending and packing plant in Indonesia, aimed at supporting
the growth of its consumer brands Anlene, Anmum and Anchor
The plant, in West Java, is Fonterra's first manufacturing
facility in the country. It is expected to be operating by
March next year, creating at least 150 full-time positions.
Demand for dairy in Indonesia was expected to grow by about
5% each year to 2020.