Market volatility is one of the factors holding back construction of a $40 million dairy plant near Kerikeri that will export long-life milk and cream.

Former Far North mayor Wayne Brown is the largest shareholder in Northland Milk New Zealand, which wants to build the factory on Wiroa Rd, about 10km west of town. It would process 300,000 litres of milk daily.

Resource consents were obtained in late 2015 but Brown said he and other shareholders were still working on their plan.

He had hoped construction would start in spring 2016 and the first consignment of UHT milk shipped out in spring 2017. But on Thursday he said the process was "complicated".
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Resource consent for the $40m milk plant was granted almost five years ago but Brown considers an alternative site now. Photo / Tania Whyte
Resource consent for the $40m milk plant was granted almost five years ago but Brown considers an alternative site now. Photo / Tania Whyte

There was a possibility the factory could be built elsewhere, he said.

"The plan to build is still alive, we're still working on it, but it's not kicking. Eliminating risks, market conditions are just some of things we are working on."

In April, the Northland Regional Council approved the company's application to replace resource consent for earthworks for the factory and construction of two dams in a dry gully on Wiroa Rd.

Northland Milk NZ did not ask for a specific duration of consent and NRC give it five years, saying that was enough time for the work to be completed.

The company would operate a different model to dairy giant Fonterra.

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

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

Twenty people would be employed in the factory and a similar number of outside jobs would be created, for example truck drivers. The milk would be packaged on site in Tetra Pak cartons.

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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 5ha 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 ruled that out.

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