Tatua signs Australian deal

By PHILIPPA STEVENSON agriculture editor

Top dairy industry performer Tatua has signed up an Australian company to boost production of the high-tech, high-priced milk proteins helping to make it so successful.

Victoria's similarly named Tatura Milk Industries is to spend $7.5 million on manufacturing plant to extract lactoferrin, a bioactive milk protein used in sports drinks and infant formulas and known to boost people's immune systems.

Waikato-based Tatua, with a $111.2 million turnover last year, is already one of the world's leading manufacturers of specialised dairy-based proteins and derivatives.

Chief executive Mike Matthews said the 132-farmer, single-factory company did not have enough milk supply and factory capacity to make more of the product itself.

"We simply need more production," he said.

The market for Tatua's lactoferrin was growing with new customers and increased sales to existing clients, Matthews said.

"We regard it as a positive development. The company is continuing to expand and we have to do this sort of thing to secure our future supply."

Tatura, also a farmer co-operative, with 450 shareholders and A$270 million ($294 million) turnover last year, had a similar history and market focus as Tatua, Matthews said.

"They have an ability to focus on value-added activity and understand that side of things very well.

"The other primary reason [for the arrangement] is that they have year-round milk supply."

The transtasman deal is the second Tatua has struck for protein manufacture in six months. In September it contracted the South Island's Westland Milk, which is now headed by the man who pioneered nutritional product sales for Tatua, protein chemist Barry Richardson.

Matthews said Tatura's plant - expected to be operational by September - and Westland's were effectively satellite factories for Tatua, which had no plans to expand its own processing capacity.

Lactoferrin is made by the tonne and sold by the kilogram, not the hundreds of tonnes normally associated with dairy industry commodity products. It takes about 10,000 tonnes of milk to produce one tonne of lactoferrin.

"We are processing all of the milk from our own farmers now and we are not actively campaigning for additional supply at the factory," Matthews said.

"If you bring all the milk in, then you've got to recover everything from it, and we don't have the capacity to do that."

In the past 10 years Tatua's capital expenditure has topped $50 million, but most has gone on value-added product manufacture rather than processing of milk.

The partners


Tatua Co-operative Dairy Company

* Founded 1914

* Based in Morrinsville

* Owned by 132 farmer shareholders

* Processes 100 million litres of milk a year

* Turnover $111.2 million

Tatura Milk Industries

* Founded 1907

* Based in Tatura, Victoria

* Owned by 450 farmer shareholders

* Processes 520 million litres of milk a year

* Turnover $294 million