Hokitika based Westland Milk is to benefit from the Government's Provincial Growth Fund (PGF) with a loan to develop high-end products.
A loan of $9.9 million has been announced for a milk segregation project.
Regional Economic Development Minister Shane Jones said the interest-bearing, repayable loan will enable Westland Milk Products to collect and process different types of milk products and milk, such as A2 milk and colostrum.
"The objective is to encourage farmers to produce milk that can be turned into much higher value products, delivering higher returns without requiring an increase in herd numbers," he said.
He said this level of segregation would pave the way for Westland Milk to grow its business by processing to higher value products.
"This is a great example how technology can help drive growth that is both meaningful and sustainable," said Mr Jones.
"Westland Milk Products has indicated it may explore using the facility to produce non-bovine milk, such as sheep and goat milk or plant-based protein," he said.
He said additional benefits from the development include upskilling some of the company's manufacturing staff and attracting new talent to the region.
"With suppliers from Karamea to the glaciers and 430 employees in Hokitika, an investment in New Zealand-owned Westland Milk Products is an investment in the economy of the whole West Coast," said Mr Jones.