Independent co-operative dairy company Westland Milk Products has announced its second-highest profit on record.
The total average payout of $7.80kg ms, less retentions of 10c, resulted in a final cash average payout to shareholders of $7.70.
The result is a 21% improvement on last year's total payout of $6.45. The result was achieved on the back of record turnover of $525 million, an improvement on the $422 million recorded in the previous corresponding period.
The company's performance was strong given shareholders were operating in a challenging climatic and economic environment, chairman Matt O'Regan said.
More than $380 million had been injected into the West Coast economy as a result of the announcement. The forecast for the 2011-12 season remained unchanged at $6.80-$7.20kg ms.
Work will begin next month on the company's paediatric nutritional manufacturing plant upgrade in Hokitika.
The project, which will be completed for the 2012 season, follows the completion of a reverse osmosis plant at Rolleston, near Christchurch, and recent capacity upgrade at Hokitika.
It will include building a dedicated nutritional products batching facility enabling Westland to produce large volumes of growing up milk powder, commonly known as GUMP, on demand.
The investment would help transform Westland Milk Products from a medium-sized commodity dairy company into a growth-oriented, value added and higher margin nutritional dairy products manufacturer, chief executive Rod Quin said.
Prosperous middle-classes in Asia and South America continued to drive global growth in the paediatric category. The market for paediatric nutrition was worth about $US24 billion a year globally, Mr Quin said.
The most exciting element of the market was its speed of growth and the fact that it was dominated by the Asian market, which was also home to Westland Milk Products' closest and most lucrative customer base.
Demand for high-quality nutritional products was also co-related to imported products following the high profile quality issues with Chinese milk-based nutritional powders, he said.
After the deregulation of the New Zealand dairy industry in 2001, nearly all the dairy co-operatives amalgamated to create Fonterra, but Westland shareholders voted to remain an independent co-operative.