A billion-dollar infant-formula industry is on the way to Hawke's Bay after Auckland-based New Zealand Dairy Products Ltd's announcement it will build an $80 million farm-based dairy factory, creating 70 new jobs.

Last week Fresco Nutrition announced it would build a $30 million plant in Hawke's Bay that would create 40 new jobs.

Dairy Products managing director, Chris Berryman, said it would purchase more than 200ha of croppable flat land - preferably irrigated or consents in place - within a 30-minute drive to Napier/Hastings/Havelock North.

Its farm-to-market model was important for access to some Asian markets. Milk would also be sourced from other local goat and sheep milk farmers.


All animals will be housed.

"With goats you have to, because of disease issues, but with sheep we get a better yield by housing them. So they'll be in sheds - we'll be cutting the feed and bringing it to them," he said.

He hoped to have funding finalised in about two months, after which there would be three months for resource consenting "and then we'll be pushing a button - we have everything prepared," Mr Berryman said.

It will produce a new product called Shegoa, a combination of sheep and goat milk that offers a boosted nutritional profile.

"Nobody has ever done that before. We are getting quite a good response from the market.

"For infant formula China is really the only developed market for sheep milk, but by combining the two goat can pull sheep through."

Demand was strong and Shegoa would probably be produced in the Waikato until the Hawke's Bay operation was complete.

"We have a number of distributors who are getting impatient - they don't want to wait two years for the factory to be up and running," Mr Berryman said.

He said there were other possible regions in New Zealand "but we got good support from Hawke's Bay".

Last week Fresco Nutrition told more than 200 delegates at a Napier Infant Formula conference it would build a $30 million spray drying and canning facility creating 40 jobs.

The conference was co-ordinated by regional economic development agency Business Hawke's Bay.

Economist Sean Bevin of Economic Solutions said there was potentially $1.5 billion in revenue and 178 jobs to be generated in the region over 10 years from direct and associated work related to the new industry.

Agency food and beverage programme manager Catherine Rusby said two operations increased the viability of support industries.

"It signals that Hawke's Bay is a serious place for growing and manufacturing non-bovine dairy products," she said.

"There are many other spin-off industries that with the right market focus could be incredibly successful too."