Singapore's Olam confirms plan to build dairy plant in south Waikato

New Waikato dairy processing site scheduled for 2023 season opening. Photo / File

Singapore company Olam has confirmed its plan to build a dairy processing plant at Tokoroa in south Waikato.

Its recently incorporated subsidiary Olam Food Ingredients New Zealand plans to begin operating the site in the third quarter of 2023.

The milk processing site would be the 14th in Waikato.

Newly appointed operations director Paul Rennie, who once worked for Fonterra, said the new facility expected to create 50 to 60 fulltime jobs when fully operational.

Rennie's immediate past employment was with Tasti Products.

General manager milk supply will be Paul Johnson, who comes directly from Fonterra.

Olam Food Ingredients Dairy senior vice president Naval Sabri said the company was taking expressions of interest from potential farmer suppliers, employees, contractors and trade suppliers.

The company has yet to receive Overseas Investment Office clearance for the plan to build the $100 million-plus factory.

Resource consents from the South Waikato District Council are also still being processed.

However, as previously reported by the Herald, Olam is no newcomer to New Zealand and industry watchers expect its applications to be rubber-stamped.

Parent company Olam International, a global food and agribusiness operation, is 53.2 per cent owned by Temasek Holdings Singapore, which is 100 per cent owned by the Singapore government.

Olam was until early this year a shareholder in New Zealand's second biggest processor and exporter Open Country Dairy.

Herald inquiries revealed Olam is not applying to the OIO under the "benefit to New Zealand" or sensitive land pathways but under the "significant business assets" application route.

Seen as a reputable company - its net FY2020 profit was NZ$252m - Olam would satisfy the OIO's "good character" test. It already owns 100 per cent of the shares in NZ Farming Systems Uruguay, a New Zealand incorporated agricultural company that applies Kiwi pastoral farming systems to Uruguay farms.

The OIO says Olam did not require its consent to buy the 11.8 hectare, industrial-zoned, property in Tokoroa's Browning St for the factory. It bought the land from Danish company SicciaDania NZ, which had acquired consents for a dairy plant. Olam has applied to local authorities to extend at least one of those consents, and for new operating consents.

A spokesperson said the new plant would produce dairy ingredients for overseas food service markets.

Olam's financial interest in the New Zealand dairy industry goes back around 13 years. It first bought into Open Country Cheese, which became Dairy Trust, in which Olam had a 25 per cent stake. Dairy Trust became Open Country Dairy in 2008.

Early Open Country Cheese investors, Motueka's Talley's Group, now owns 100 per cent of Open Country Dairy, early this year buying out Olam's stake, by-then reduced to 15.1 per cent, for $80.9m.

Open Country has two dairy processing sites in the Waikato. Fonterra has eight.
Other plants are the Tatua cooperative near Morrinsville, Miraka near Taupō, and Synlait and Yashili at Pokeno.