Westland Milk has been operating for 75 years and over the past seven years had been making infant formula. It was time to grow, not just in volume but also the diversification of the infant formula product, general manager operations Bernard May said.
“There is very strong customer demand for Westland to diversify into infant formula and it also fits well within our growth strategy to increase the value of a bucket of milk,” May said.
The new plant started commercial production last month and already has committed customers.
The milestone takes Westland from being a well-respected dairy-ingredient supplier to an exciting new entrant in the infant-nutrition sector.
Westland was well positioned to make this strategic move, May said. It had already earned a reputation as a flexible and innovative player in the global dairy market, with a strong focus on customer relations, technology and the ability to deliver products to exacting customer specifications.
While there was good demand from China and South East Asia, Westland was working on diversifying its customer base, he said.
“We need to grow in line with the growing customer demand. This growth will add value for our shareholders. As the business ramps up, scale will equate to improved payouts. It’s about getting good returns for farmers.”
Westland will be producing a specific customer product, making infant formula to prescribed customer recipe.
The new plant would help transform Westland from a medium-sized commodity dairy company into a growth-oriented, value-added and higher-margin nutritional dairy products manufacturer, May said.
“We will get at least 30% of business focused into this specialised nutritional area in a transitional move away from pure commodities.”
Westland was in the fortunate position of being small enough to have a close and effective relationship with its customers, but also big enough to count, he said. The company also had a good reputation for research and development, having won the 2012 New Zealand Trade and Enterprise award for best use of research and development.
It now had the technology to succeed in the dairy nutritionals market, with products designed for specific customer needs.
The new Westland nutritional plant comprises a wet-mix batching system including wet and dry macro and micro ingredient-handling areas, oil dosing, vacuum mixing, homogenisation and pasteurisation. Traceability of all ingredients is enabled through detailed logs and batch-control software. The products are dried through evaporation and spray drying and are packed in a newly created high-hygiene area.
“To achieve success in the nutritionals market we have to have the sophisticated technology required,” May said. “It’s a huge step for us to take, but one that expresses confidence in the future of Westland as a company and dairying as an industry.”
In the meantime, Westland’s proposal to establish a three-dryer plant for manufacturing nutritionals across the Alps has moved a step closer, with consent granted this month for the proposed Rolleston development.
The farmer-owned co-operative has not put a timeframe on building the plant. The passing of the consent phase had created options to consider, May said.
“We are very pleased to get the consent. It gives a lot of options for the future and we will certainly utilise that site and its capability when the time is right.
“Right now Hokitika is the priority and as we build this (new plant) to capacity the co-operative will then consider its options.”
Further processing at Hokitika was also an option, he said.