Brown's $40m plan to cream it - ethically

Former Mayor Wayne Brown is planning a UHT milk plant on Kerikeri's Wiroa Rd, next to Top Energy's new substation (the building at right) and a Kerikeri Irrigation Company reservoir (behind the trees). Photo / Peter de Graaf

Former Far North Mayor Wayne Brown says his planned $40 million dairy plant near Kerikeri will start exporting long-life milk and cream to China in late 2017 if all goes to plan.

The factory will be built on Wiroa Rd, about 10km west of town, at a cost of about $40 million and process 300,000 litres of milk daily.

Wayne Brown.

The last resource consents were obtained before Christmas and working drawings are now being prepared ahead of a building consent application.

Mr Brown hoped construction would start in spring this year with the first consignment of UHT milk shipped out in spring 2017.

The company, Northland Milk NZ, would operate a different model to dairy giant Fonterra.

While Fonterra sold its milk at auction and paid farmers according to the fluctuating global milk powder price, Northland Milk would pay farmers a set price and sell its finished products to two companies which each had 3000 retail outlets in China.

The contract would protect farmers during down times, Mr Brown said.

"When the milk price is low we'll be paying more. When it's high they'll have to stick with us anyway, but they won't be losing. We know we'll do better than the crap prices farmers are getting now."

The company would start approaching farmers, initially in a 20km radius, once the project was certain to go ahead.

"We're not coming to local farmers until we've committed to start building and it's absolutely risk free," Mr Brown said.

Twenty people would be employed in the factory with a similar number of outside jobs created, for example for truck drivers.

The milk would be packaged on site in Tetra Pak cartons.

Mr Brown, currently the largest shareholder, said he was still raising the roughly $40 million needed, but he had enough to get started on working drawings.

The companies being supplied in China would also buy shares in the factory.

Farmers could buy shares if they wanted but, unlike Fonterra, that was not a requirement.

Other investors included a Kiwi ex-pat in Hong Kong.

The milk would be bought from local farmers with no overseas ownership of land involved.

Northland had been chosen for the venture because its climate made it possible to get a year-round supply of milk, and Kerikeri because it already had a food industry with the expertise, refrigeration firms, laboratories and other infrastructure needed to support a milk plant.

It would be built on a 5ha property next to a new Top Energy substation and a Kerikeri Irrigation Company dam, ensuring a good supply of power and water.

Up to a dozen refrigerated containers a day will be trucked to the port at Auckland.

Originally the dairy company had wanted to truck the containers to Moerewa then load them on to a train, but low tunnels and KiwiRail's lack of low-bed wagons mean they won't fit.

Northland Milk's two other directors are Neil Domigan of Manukau and David Mace of Arrowtown.