The agreement is conditional on both parties being satisfied that certain operational and quality conditions have been met.
Those conditions include BLI purchasing a minimum of 4800 metric tonnes per year of milk powders that are destined for export markets, that the agreement have a three-year minimum term and that Happy Valley complete construction of its factory near Otorohanga and it satisfies BLI’s quality assurance requirements.
According to its website, Chicago-based BLI is an ingredients supplier offering dairy sourcing and logistics for milk fats, powder, protein powders, cheese and specialty products such as lactoferrin.
“This is a major development for Happy Valley and an important vote of confidence from a global distributor specialising in dairy ingredients, based in Chicago.” the announcement on the Australian Stock Exchange read.
“Securing this supply agreement validates the requirement for the type of capability our plant offers customers. Our goal is to work with our partners to satisfy market demands,” Happy Valley Nutrition Limited chief executive Greg Wood said.
Construction of Happy Valley’s factory is in its first phase, with earthworks under way. Earlier this month it announced it had completed the purchase and settlement of the 142ha of farmland, called Woolly Farm, which the factory is located on.
Part of its purchase agreement of this land includes a 100-year lease agreement with the owner of nearby Waipa Meadows farm.
Under the lease, the lessee will continue to use the property as a dairy and dry stock farm to generate revenue, but will allow Happy Valley to irrigate wastewater from the factory without relying on third party service providers.
Wood says the settlement was a fantastic milestone, as the land acquisitions were now complete for the factory.
Once operational, Happy Valley’s factory will have capacity to produce 35,000 tonnes per year of products and aims to commence operations by mid-2023.