Big dairy investment in Southland

Cattle Cow Farm in New Zealand. You can even see sheep on the typical green hills in back.

A $200 million dairy plant is to be built in Southland, providing at least 100 new jobs.

Mataura Valley Milk (MVM) has announced plans to build a nutritional powders manufacturing plant in the small township of McNab, just minutes outside of Gore.

The company is majority owned by China Animal Husbandry Group (71.8%), one of China's largest state-owned enterprises.

The remaining shares are held by Southland dairy farmers and New Zealand milk powder company BODCO.

MVM director Aaron Moody says the investment's aimed at tapping into the growing international demand for milk powder.

"The global infant formula market was worth $57b in 2013," he says.  "The market in China alone is expected to reach $38b by 2017."

One big advantage for both the company and dairy farmers is the greater price stability of milk powders, compared to volatile global dairy prices.

The modern plant will produce infant formula, UHT (long life) cream, and small amounts of skim milk powder.

Most of the products will be canned and distributed by Hamilton-based partner BODCO, with a focus on exporting to China.

Construction is hoped to be underway in October, on 26 hectares of land, five kilometres north of Gore.