Chinese ventures promote growth

Tuesday, 25 November 2014

Dairy companies could be spending $1 billion at their South Canterbury factories.

Oceania dairy's newly opened Glenavy plant will receive $400 million in new plant and equipment over the next five years. Oceania's owner, the $7.6 billion Inner Mongolia Yili Industrial Group confirmed the upgrade this morning at the opening of the plant.

The planned new milk dryer, infant formula canning line, Ultra-High Temperature milk and lactoferrin pant is expected to require 150 new workers.

Yili Group executive president Zhang Jianqiu said the plant was ideally positioned to help meet the growing Chinese demand for milk.

Shanghai Stock Exchange documents show the company has plans for 4 new projects, including an estimated $201m milk powder plant, a $92.4m ultra-high temperature (UHT) milk treatment plant, a $40.2m raw milk processing plant, and a $66.4m packaging plant.

It is understood that $200 million of that investment applies to Glenavy, but if the other half does as well, it will bring to $1 billion in new plant announced for South Canterbury.

Fonterra has previously announced plans for 2 new milk powder dryers at its Studholme factory, estimated to cost up to $600m to build, and a $72m plan to double mozzarella production at its Clandeboye factory.

Both the Waimate and Waitaki districts expect huge benefits following the announcement of Yili's plans.

Waimate Mayor Craig Rowley said Yili's plans were fantastic news for the district.

'Obviously the council encourages development within the district . . . we are ecstatic that someone is going to invest that kind of money in our district.

'It's going to have huge flow-on effects for employers, so it's a real positive for everybody.'

He said not only would businesses related to the dairy industry benefit, but also those that offered other services, such as laundry, catering, and pest control.

Waitaki Mayor Gary Kircher said the district had already seen economic benefits in sectors such as hospitality and engineering since the plant had been in operation and expected them to continue.

'We have felt the positive impact of that and there's no reason why we couldn't have further, similar benefits.'

He said Yili's plans would also provide strong employment opportunities.

'Currently we have around a third of the plant's full-time staff coming from Waitaki. Expansion means more jobs, both here and in Waimate.'

Yili said the Glenavy plant, which it had already pumped 1.2b yuan (NZ$250m) into, would be the largest integrated dairy production base in the world.

Timaru resident and director of the DairyWindow database company Shaun Henderson is hopeful this morning's confirmation of $400m being spent on plant and equipment at Glenavy, will have a spinoff for his company.

The company developed laboratory and factory databases for the factory and he was hopeful the expansion would mean additional work for the company.

South Canterbury dairy farmer Wilma van Leeuwen thanked Yili for building the plant.

Growing dairy production in the region had 'dramatically changed' local landscapes, she said, adding it was supported by reliable irrigation supplies which allowed stable milk production.

Associate Trade and Associate Foreign Affairs Minister Todd McClay said the plant's completion was a sign of growing trade between New Zealand and China, which now totalled more than $20 billion per year