Friday, March 29, 2024

Mataura Valley considers expansion plans

Neal Wallace
The board of the country’s newest milk processor, Mataura Valley Milk, is considering expansion plans after just one season of operation.
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Chief executive Bernard May says its 20-farmer supply base from last season is stable and it is considering applications from new suppliers.

Mataura Valley is looking to grow its supplier base rather than rely on milk supplied under the Dairy Industry Restructuring Act or contracting surplus processing capacity at its Gore plant to other companies.

Thee terms and conditions being offered to new suppliers are still being confirmed by the board and are unlikely to suit everybody, May says.

Some potential suppliers are disappointed the company is not seeking greater volumes of winter milk.

“We are committed to our existing winter milk suppliers and looking for a bit more but not a major expansion next season.

“We will do so in the long term, possibly in seasons three or four.”

Many southern farmers have loafing barns and stand-off pads and May says they are keen to secure winter milk contracts to improve returns on those investments.

Shareholders were supportive of the strategy at a recent meeting.

The company operated at capacity within three months of opening, handling a season peak flow of 1.1 million litres a day and the board is now considering expansion plans.

He declined to provide further details.

The company’s initial focus has been on whole milk powder while it completed commissioning but in recent weeks successfully produced its first batch of nutritional formula.

May says feedback and analysis shows it to be of high quality and all the product has been sold.

Following that success, production of nutritional products will increase.

“We are very pleased where the season has ended up,” he said.

Processing began at the $240 million plant last August, 20 months after construction started at McNab, north of Gore.

Its cornerstone shareholder is China Animal Husbandry Group along with local investors including founding suppliers.

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