The opening of a new $240 million milk plant in Southland is expected to bring major benefits to the region's farmers and the local economy.
Mataura Valley Milk's nutrition plant near Gore has been offcially opened by the Minister of Agriculture, Damien O’Connor.
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Its major shareholder is the China Animal Husbandry Group (CAHG), which is in partnership with New Zealand shareholders and Southland farmer shareholders.
Mataura Valley Milk's plant is aiming to extract top value out of the region's cows, targeting the premium nutrition market, ranging from infant formula through to the growing adult market.
"In New Zealand they might sell for $30 a can, but in some markets around the world, some people will pay up to $85 to $100 per can," said General Manager Bernard May.
He said their vision has always been to create high value nutritional products.
"It’s taken a phenomenal effort, in excess of 900,000 hours, from a lot of people across a lot of sectors to get to where we are today," he said.
Most of the company's southern farmer suppliers are also shareholders, and many have defected from Fonterra, attracted by a higher payout for their milk.
In return, they'll have to meet targets around sustainability, animal welfare, and milk quality.
"Because they see the opportunity to have a closer relationship with the customer at the other end, they see the opportunity to gain greater reward for their milk," said Milk Supply Manager Dave Yardley.
Meanwhile the company believes it could be a model for the dairy industry.
"We believe we have struck the right balance to achieve a successful partnership model allowing all shareholders, including farmer shareholders, to invest in the global nutrition market, benefiting everyone involved," said Mr May.
He said the plant is running at capacity, processing about 700,000 litres of milk a day, and the first shipment of whole milk powder left in early November.
Nutritional product trials begin in mid December, with the first commercial production set down for February. A rigorous testing process follows, with first nutritional products likely to be leaving the plant in April.
The high-tech plant will also boost the Southland economy by around $90 million a year
Newshub.