Fresco Nutrition, which makes dairy goat infant formula, says it will build a spray dryer in Hawke's Bay, enabling a farm-to-market industry in the region.
The announcement was made at Thursday's Infant Formula Industry for Hawke's Bay Conference, where Fresco founder Gregg Wycherley told more than 200 people: "When we build, we will build here".
The company has a four-year lease with Innovation Waikato, part of the Government's New Zealand Food Innovation Network, to use a spray dryer there.
Building is due to begin in two years and will cost $30 million. Once fully operational, it will provide about 40 jobs.
Establishing a goat dairy industry in Hawke's Bay is a focus of regional economic development agency Business Hawke's Bay (BHB).
Agency food and beverage programme manager Catherine Rusby said she was sceptical when told Hawke's Bay would be ideal for the industry, until approached by infant-formula processors looking to build their own capability because existing spray dryers were fully booked.
BHB aims to capture the value chain for the region: Breeding, raising, milking, processing, packaging and exporting.
Infant intolerance to cow milk is a common problem, resulting in a burgeoning world market for alternatives, particularly in Southeast Asia.
Goat milk is rich in protein, calcium and vitamins and is easier to digest than cows' milk.
Mr Wycherley said Hawke's Bay ticked all the boxes: climate, land prices, logistics, infrastructure and supportive local government.
The full-day conference saw a range of speakers outline commercial aspects of the industry at the Napier War Memorial Conference Centre.
Hawke's Bay Regional Council economic development manager Tom Skerman presented economic impact research projecting $1.5 billion in revenue and 178 jobs for Hawke's Bay over 10 years, based on 18 farms, construction of the processing plant and packaging facility.
Ministry for Business, Innovation and Employment adviser Andrew McCallum outlined the market niche for goat milk formula, saying the Chinese market for baby food/infant nutrition was growing more than 50 per cent more than the rest of the world combined.
Others to speak included farmers David Phillips and Lydia Baty, who recently converted 41ha from sheep and beef to goats near Havelock North. The father/daughter combo shared experiences and the rationale behind milking 650 goats, fielding many questions from the audience.
Ms Rusby has been investigating the industry opportunity for eight months. "Our aim was to show those attending where the business opportunities are so they can go away and do the due diligence to determine if it is right for them," she said.
"It's an opportunity for the region to add another string to its bow that will create jobs both on farm and at a more technical production level. It could provide marginal farming operations with a viable alternative. "