NEW ZEALAND – Southern Pastures LP has announced that it would form a new venture with Westland Milk Products with intention to become a shareholder in the New Zealand’s dairy provider.
As part of the agreement, Westland will receive more than 4 million kilograms of milk solids annually from Southern Pastures’ Canterbury dairy farms.
Southern Pastures and Westland aired plans of forming a 50:50 venture with the intention to create dairy products from free range, grass-fed milk following strict requirements to meet standards.
According to the company, it hopes to achieve sustainable development, as they were considering focusing on animal welfare, human health, climate change and advocating for human rights.
Their opportunity to grow into New Zealand was driven by an understanding for consumer preferences that will help them make products from eco-friendly ingredients.
Even though selling of the premium products require the consumers to pay more, New Zealand will benefit from products made sustainably to drive growth in the market.
According to Prem Maan, Southern Pastures Executive Chairman, venturing into Westland was motivated by its business turnaround after posting a net loss of US$14.5 million after tax for the year ended July 2016.
The company made changes on its Board with a reduction in Westland’s board from 11 to 8 and appointed Andrew MacPherson as the company director.
“Our advisers have calculated that our move will add to the Westland pay out from the very first season, providing a real economic fillip to the region.
We also see real strength in the common bond of farmers and, as such, we’re committed to the cooperative model.
That makes Westland a natural business partner for us,” said Maan.
He added that their experience in the dairy sector will enable the company enter the premium market where consumers not only understand the value for money but also for sustainability.
Making premium dairy products from New Zealand’s free-range, grass-fed dairy farming systems would cause a shift from just offering products in the commodity market.
“While our commitment to protect, nurture and improve our environment is at the core of our practice, we don’t see any conflict between promoting sustainability and maximising economic returns.
In fact, we’re convinced that sustainability is actually the key to creating value and long term economic performance,” he concluded.