Pace of change picks up with Westland milk powder joint venture

Westland Milk chief executive Toni Brendish. Photo / File

Pure Nutrition Ltd (PNL), a joint venture company formed by Hong Kong-listed Ausnutria and Hokitika-based Westland Milk Products, has started its milk powder blending and canning operation in the Izone business hub near Rolleston.

The company was established through an initial investment by Ausnutria of $4.5 million, and the transfer to Pure Nutrition of land owned by Westland at its Rolleston site, which had a value of $3m.

PNL is 60 per cent owned by Ausnutria and 40 per cent owned by Westland Milk Products.

PNL general manager Terry Wu said in a statement the Rolleston plant had received all of its certifications from New Zealand's Ministry for Primary Industries and can now export non-infant formula to every country.

Chinese registration for infant formula is pending and is expected to be completed soon.

The factory opened with 24 staff and Wu said it was likely to expand, especially once they start processing for Ausnutria's China market.

The plant is capable of canning 30,000 tonnes of nutritional product per year when running at full capacity.

Ausnutria Chairman Weibin Yan said the formation of the joint venture is an important milestone for Ausnutria and part of Ausnutria's global expansion plan to access premium milk supply throughout the world.

Pure Nutrition will be primarily responsible for the production of the Puredo series of products for Ausnutria.

Westland chief executive Toni Brendish said the joint venture relationship was an important part of the partnership between Ausnutria and Westland and the agreement also provided Westland access to the canning plant to process product destined for customers other than Ausnutria.

"Pure Nutrition is effectively, a substantial new customer for Westland Milk Products," Brendish said in a statement.

"In addition to the direct sales to Ausnutria in China, which will continue, Westland will be the joint venture's supplier of dairy based powders for Ausnutria and other customers looking for high class canning facilities".

The joint venture has a five-year establishment phase, during which profits will be reinvested into the business, after which dividends will be paid to both partners.

Ausnutria has production facilities principally based in the Netherlands, Australia, China and in New Zealand.

The group's activities range from the research and development, milk collection, processing, production, packaging, marketing and sales of dairy products to mainland China, Europe, North America, the Middle East and Russia.

The pace of change is picking in the New Zealand milk powder and nutritional space.

Last week, French food giant Danone unveiled a $25m upgrade and expansion of its Auckland infant formula blending, processing and packaging plant, effectively doubling its production capacity.

This week, NZX-listed Synlait Milk said it had conditionally bought a site in Pokeno in Waikato where it plans to spend $260m developing its second nutritional powder manufacturing factory.

The Rakaia-based milk processor's acquisition is subject to Overseas Investment Office approval, and the company said it will know the commissioning date for the factory once it's got consents and approvals. The first dryer at the Pokeno site is expected to have an annual capacity of 40,000 tonnes.