NEW ZEALAND – Synlait Milk has invested approximately US$125 million in an advanced liquid dairy packaging facility in a partnership with Foodstuffs South Island Limited to supply fresh milk and cream from early 2019.
According to the company, it is seeking diversification in its business through investment in a range of dairy-based products that will guarantee its customers quality products at both domestic and international level.
It adds that the deal will not only portray Synlait as a balanced dairy business but also strengthen its position as a global exporter of dairy products.
“Combined, the partnership with Foodstuffs South Island and investment in a new facility is a further and significant step towards our goal of being a more diversified and balanced business,” said John Penno, Managing Director and CEO.
The company believes that the partnership will expand on its diversity plan as they seek to explore a new pool of customers and improve their market coverage in the dairy sector.
The strategic partnership was ideal for both parties who targets to win the customers in New Zealand as the category represented the dairy products people consumed every day thus establishing a firm local foundation.
“This category represents the dairy products people consume every day.
Our long-term success in this category will be based on our ability to win customers in the New Zealand market first and today we’re taking a foundational step towards that.
Synlait’s partnership with Foodstuffs South Island is strategic for both parties,” said Mr Penno.
Combined efforts with Foodstuffs marked a good step by the company to avail fresh milk in the South Island, the milk they source from the Canterbury dairy farmers.
“The partnership allows the Cooperative to provide high quality fresh milk and cream to our customers.
The partnership allows us to give our customers surety around milk supply with innovative New Zealand-based milk supplier,” said Steve Anderson, CEO Foodstuffs South Island.
“In time, we are looking forward to collaborating with Synlait to create a range of new and innovative dairy-based products that our customers will enjoy.”
The technical new product development expertise needed to establish, validate and deliver these capabilities at Synlait will be provided by Synlait’s research and development center in Palmerston North, which is in collaboration with Massey University and FoodPilot.
The facility with a minimum annual capacity of 110 million liters will produce high-specification pasteurized milk and cream for domestic use, extended shelf life (ESL) dairy products, long-life milk and cream for export, ready to drink (RTD) liquid infant formula and toddlers milks and other blended dairy-based beverage products.
The investment will also focus on development of advanced liquid blending and packaging systems allowing Synlait to produce fresh milk and cream for domestic use and the ability to pursue a range of dairy-based extended and long-life consumer products in future.
“We’ve demonstrated that we can introduce new capability, manufacture world-class product, build a profitable business around it and provide a long-term strategy for sustainable returns.
This will be no different,” said Mr Penno.