Open Country Dairy aims to be self-sufficient in water by 2022

The country's second biggest dairy processor, Open Country, has begun commissioning a $20 million Waikato wastewater treatment plant claimed to be so advanced the company's chief executive was game to have a drink from it before water was tested.

Chairman Laurie Margrain said the company had so much confidence in the technology behind the new system at its Waharoa site that chief executive Steve Koekemoer had a glass from the first, untested, output with "absolutely no adverse outcome".

Margrain said the technology was the first of its kind to be used in New Zealand.

It allows Open Country to treat and reuse water from raw milk, and is part of a company programme to be self-sufficient for water at all its plants nationwide by 2022.

"That's our intention. We don't know what the future of water ownership will be and what charges will be ... by recovering cow water and treating it we can use it to wash down our plants. On some sites at the moment we buy water and on one site we use bore water."

The privately owned company, which keeps a low profile, had been "quietly" installing technology for plant-water self-sufficiency for some time, Margrain said, but not on the investment scale of that at the Waharoa cheese-processing site.

Open Country late last year copped the largest fine given in the Waikato for discharging an objectionable odour that caused significant impacts on the Waharoa community, near Matamata.

The company was convicted and fined $221,250 for discharging objectionable odour and unlawfully discharging wastewater, impacting a local river.

Prosecutor, the Waikato Regional Council, said it was the largest fine imposed under the Resource Management Act in the Waikato region.

In March 2018 the council discovered the odour issues were connected to the failure of Open Country's Waharoa wastewater pond liner. As a result, the Waitoa River was also contaminated.

Margrain said the new wastewater plant would be fully operational by March or April.

Meanwhile, Open Country, which is supplied by about 1000 dairy farmers around the country and exports dairy ingredients to more than 60 countries, continues to expand operations.

It is building a third milk-powder dryer at its Awarua, Southland, site, which will start processing in September. The expansion will enable the site to produce skim milk powder and anhydrous milk fat, a high-quality pure dairy milk fat.

It has also completed a 14,000sq m pre-shipping storage facility, having outgrown the facility at South Port. A second stage is planned. Margrain declined to share the cost of the Southland expansion but said it was "well in excess of $100 million".

"Our programme won't stop when Awarua is finished. We're not currently contemplating new sites but there could be expansions of existing sites."

Margrain said the Awarua expansion was already fully supplied by committed farmers.

Open Country, which started with two suppliers in the Waikato in 2004, is the world's second biggest exporter of wholemilk powder after New Zealand industry heavyweight Fonterra. It collects about 9 per cent of the country's raw milk. Fonterra collects around 80 per cent.

Majority owned by the Talleys Group, in addition to processing sites at Awarua and Waharoa, it operates plants at Horotiu in the Waikato and in Whanganui.