The deal, which is for the milk powder factory at Clydevale near Balclutha, and the blending and packaging plant in Auckland, is subject to regulatory approvals and the affected sharemilkers are still unsure of its implications.
The farms are owned by Grant Paterson, of Dunedin, and sharemilkers are paid the Fonterra milk price for what they produce. They must adhere to a raft of rules, such as no feeding of palm kernel and no inductions, to supply the plant which produces high-grade infant milk powder for China.
Many of the sharemilkers’ cows are wintered on the Clydevale plant’s land and their young stock grazed there throughout the year. Waste water from the plant is irrigated on the farm using a large pivot.
Overseas Investment Office (OIO) manager Annelies McClure said French company Danone’s application, received on May 13, stated it did not include any sensitive land. The definition of sensitive land, under the Overseas Investment Act 2005, includes 5ha or more of rural land.
“Until the OIO has had the opportunity to fully assess the application it is not in a position to know whether it involves any sensitive land,” she said.
Gardians, which stands for Greenfields Agricultural Research Dairy Innovation and Nutritional Systems, is jointly owned by Auckland-based food packaging company Sutton Group and Paterson.
The Clydevale processing plant, commissioned in spring 2012, uses the latest European spray dryer technology and can produce 20,000 tonnes of powder a year which is trucked to Auckland for packaging and export. Paterson, who used to send his milk to Open Country at Awarua Bay near Invercargill, is the only supplier to the Clydevale plant, guaranteeing traceability and paddock-to-glass quality control for customers.
Danone’s local subsidiary Nutricia was caught up in last year’s Fonterra botulism scare, recalling product in NZ and Asia (Dairy Exporter, February, page 32). The company is now suing Fonterra for alleged breaches of the Fair Trading Act saying the false alarm cost it €350 million and it wants compensation. Nutricia ended its supply contract with the co-op last year. It has since sourced product from Synlait and other NZ manufacturers.
In a statement from Paris, Danone said buying Gardians would “provide Nutricia with a large milk drying capacity along with long-term fresh milk supply access”.
A spokeswoman in Australia said no plans would be made for expansion of the Clydevale or Auckland plants until the deal had regulatory approval.
“It would be putting the cart before the horse if we were. We are just so thrilled that we are hopefully investing further in NZ.”
Gardians, along with Nutricia and Fonterra, was one of the first NZ infant milk powder companies to gain registration to export to China under the new food safety regulations which came into effect on May 1.
