New cheese venture seeks $15m with public offering

By LIAM DANN

A new dairy company plans to raise $15 million next month with a public share offer.

Open Country Cheese - headed by former National MP Wyatt Creech - has begun construction of its new, state-of-the-art cheese factory in the Waikato.

The company plans to process 50 million litres of milk each year into 5000 tonnes of premium-grade cheese for export.

When it begins production in October it will be the first new independent dairy operation since Fonterra was formed in 2001.

If the public offer is successful, the company will have total capital of about $28 million.

The remaining $13 million in equity will be owned by cornerstone investor Talleys Fisheries and the founding shareholders - who include Creech.

Open Country Cheese was registered in November 2001, a month after Fonterra was set up.

Others on the board of directors include former Fonterra treasury head Geoff Taylor, Duncan Milne - a director of several rural companies including Wool Equities - and Andrew Talley.

There were no plans to list the company on the stock exchange, Creech said.

Shares were being offered to the public to allow locals, farmers and others with an interest in the dairy industry to get involved.

Though Open Country would be an export rival to Fonterra in some markets, the two companies had a good relationship, Creech said.

Fonterra would supply Open Country with all its raw milk requirements.

"I think they see us as adding a dimension to the New Zealand dairy industry rather than trying to do what they're doing."

Built in the shell of the old Dairy Group's Waharoa plant near Matamata, the factory will use processing equipment imported from North America.

It would be fully operational in time for the new dairy season in October, Creech said.

The factory would produce premium-quality hard and semi-hard cheeses - such as cheddar and colby.

With a relatively small scale of production, Open Country could tailor its output to specific customer demands, Creech said.

It would target markets in Australia and Asia.

Flexibility was a design feature of the plant. It would be able efficiently produce relatively short runs of special cheeses such as kosher and organic products.

The factory would also cater to tourists, Creech said. It was located on the main tourist line from Auckland to Rotorua and would be a showcase for the local dairy industry.

The factory has been designed with a positive air pressure cheese hall to protect the product from damage by airborne pathogens.

But outside that hall, specially designed windows would allow visitors to view the cheese-making process without any risk of contamination.

The timing of the share release and more detailed information for potential investors would be posted on the company website soon, Creech said.