Plant on target, milk contracts full

Oceania Dairy's new milk processing factory at Glenavy has reached its maximum height, with the...
Oceania Dairy's new milk processing factory at Glenavy has reached its maximum height, with the focus now on fitting it out so it is ready to start next season. Photo by David Bruce.
A new milk factory at Glenavy will start its first processing season later this year with more milk than it hoped.

Chinese-owned Oceania Dairy was aiming at 130 million litres for its first season, but now has contracts with 46 suppliers for the supply of 170 million litres.

The drying tower for the $214 million plant on a 38ha site at the corner of State Highway 1 and Cooneys Rd has reached its maximum height, with a focus now on associated buildings and fitting out. Being built for Chinese company Inner Mongolia Yili Industrial Group, it is on target for completion in time to take milk in August.

Oceania chief executive Aidan Johnstone said the company was delighted with the strong support from the farming community.

''The response from local farmers has been extremely positive and their strong interest in supplying Oceania has resulted in us exceeding our target milk supply volume,'' he said yesterday.

The factory will operate at about 65% of capacity in its first year, producing 30,000 tonnes of milk powder.

The first milk supply agreement was signed late last year with dairy farmers Aad and Wilma van Leeuwen representing a group of foundation suppliers covering 20 farms.

After that, there had been strong supplier demand from farmers in the South Canterbury-North Otago region. Oceania identified farms within a radius of 50km from the Glenavy factory as its home collection area.

''All of our milk supply contracts are with farmers within our targeted collection area,'' Mr Johnstone said. That included seven new dairy conversions for the 2014-15 season. The agreements were for a minimum supply period of three years.

Once the plant moved to full production by 2016-17, it would employ about 70 people, process 300 million litres a year and produce 47,000 tonnes of milk powder for export to China to be used in infant formula.


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