Westland Milk Products, making US inroads with its premium Westgold butter, will soon be the world's third largest producer of the lucrative protein lactoferrin. Photo / Clinton Lloyd Photography
Westland Milk Products, making US inroads with its premium Westgold butter, will soon be the world's third largest producer of the lucrative protein lactoferrin. Photo / Clinton Lloyd Photography
Westland Milk Products will become one of the world’s top three producers of the “white gold” dairy protein lactoferrin when it trebles output from a new plant this year.
Lactoferrin is a small and highly lucrative nutraceutical component of milk, sought after for its high nutritional value and antibacterial, antiviraland anti-cancer properties and for regulation of the activity of the immune system.
Hokitika-based Westland Milk has been making this essential ingredient of infant formula for 20 years but plans to significantly broaden its global market share from August when it commissions a $70 million new production plant.
The development will offer both freeze-dried and spray-dried versions of what is known in the $26 billion New Zealand export dairy industry as “white gold”.
Hamish Yates, general manager for sales and marketing, said Westland’s expertise in lactoferrin has led to its laboratory and technical people acknowledged as leading market experts in the bioactive ingredient, writing white papers and articles for leading industry journals.
“It’s literally one of the most important and beneficial proteins that exist in human milk, and in regards to early life nutrition, it plays a really important role in the development of the defence system of an infant in its very early days,” Yates said.
“It provides very similar nutritional and biological benefits as human lactoferrin so its inclusion in infant formulas, particularly in stage one infant formulas, is very important. But it offers a lot to humans in other parts of their lives as well.
“It basically kills any bacteria that it comes in contact with, it’s anti-fungal and anti-viral, and has a whole lot of benefits for topical applications, helping wounds heal faster and bone regeneration, when used as a supplement.”
Hamish Yates, general manager, sales and marketing, Westland Milk Products. Photo / Clinton Lloyd Photography
Lactoferrin is such a small component of milk that complex technology and manufacturing processes are needed to extract it, Yates said.
Westland Milk has long produced export lactoferrin in freeze-dried form but the new plant will enable it to also offer a spray-dried product and to move into a new range of products.
“Some customers prefer freeze-dried and will only buy that, some will only buy spray-dried. Now we will have both options available, which is very unique.”
For commercial reasons, Yates won’t discuss its lactoferrin volumes or revenue but said the product was Westland Milk’s highest revenue product per metric tonne. But it’s costly to produce, he said.
The building for the lactoferrin production plant was completed and the stainless steel was now being installed, he said.
“We are still on track for commissioning early in the [new] season so in August/September we’re going to be focused on running milk through the plant, getting everything dialled in with the view to having graded commercial samples available to us as the sales team to send out to prospective customers to consider and approve.”
Hi-tech factory
The “state of the art” plant will enable Westland Milk to lift its lactoferrin production capacity by almost three times, he said.
Currently, at least 90 per cent of Westland Milk lactoferrin goes to infant formula makers. China is the biggest market, with some production going to Japan, Korea and Europe.
“Obviously, in going to almost three times our current capacity, from a risk management point of view we need to look broader than that category ... in our business development programme we’re starting to explore other categories for lactoferrin and what other countries may have opportunities for us,” Yates said.
The expansion was in line with a strategy to redirect and increase the volume of milk supplied by Westland’s 400 or so farmers into high-value export products, rather than commodities.
These days owned by Chinese dairy giant Yili after a distressed sale in 2019, Westland Milk is also making strong inroads into the US premium branded butter market with a presence in Walmart, Costco and other American supermarkets.
The lactoferrin development was akin to the butter strategy, Yates said, in that the company was developing and expanding areas in which it already had an “excellent” global reputation.
“(We’re) doubling down on our capacity in what was a proven concept. We also wanted to continue to show innovation and leadership, and use the IP and expertise we’ve built up inside over the past 20 years.”
The former farmer-owned cooperative has been operating on the West Coast for more than a century when it was sold to Yili.
Andrea Fox joined the Herald as a senior business journalist in 2018 and specialises in writing about the dairy industry, agribusiness, exporting and the logistics sector and supply chains.
