“We did the survey, we asked the question and I wouldn’t say there was high interest,” Oceania Dairy general manager Roger Usmar said.
What the survey did do was generate discussion about certified organic supply.
“Farmers were certainly interested and questioned what it would take for them to set-up for organic supply,” Usmar said.
“At this stage we have no firm market opportunity and interest wasn’t that high so no real progress towards organic at this stage,” Usmar said.
But it would stay on the drawing board.
“It may be an option to further explore in the future.”
To process organic milk Oceania first had to install an ultra high temperature (UHT) plant capable of producing an organic product, Usmar said.
“And we are under way with that now.”
The $200 million, three-stage, five-year expansion project began this month.
When complete it would include a UHT plant, formula canning line, blending facilities and an enlarged storage area.
“If we can source an economic volume of organic milk and secure a market then certainly organic could be an option in the future once we have the UHT plant complete,” Usmar said.
When all three stages of the expansion project were complete the processing plant would be capable of handling more than 630 million litres of milk a year.
“We have also got to take the next step to recruit more farmers to meet that demand and we will also be doubling our staff, adding a further 80 people to the business,” Usmar said.
The completed project would increase Yili’s total investment in Oceania Dairy to $400m.
Yili established the Satine Organic Milk brand in the Chinese market in 2007 and was now keen to leverage New Zealand’s reputation for world-class dairy products.
