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Thursday 30 June 2022

Westland Milk in $40m butter expansion play

25th March 2021 By Bridget O'Connell | | @foodtickernz

West Coast dairy company Westland Milk Products is investing $40m to double the capacity of its Hokitika butter manufacturing plant as it looks to expand its global consumer footprint.

The move is part of the company’s plan to transition from a supplier of mostly bulk commodities into the production of consumer goods following its $588m purchase by China-based global diary giant Yili in 2019.

“The investment highlights the important role Westland plays in Yili’s ongoing plans to supply international industrial and consumer markets,’’ Westland resident director Shiqing Jian said.

The company hoped to tap into the forecast growth in annual global butter and spread sales, which are predicted to grow from a current estimated $US44tr to $US59tr by 2025, with the US, Russia and China regarded as the world’s largest importers of butter.

“New Zealand is one of the world’s major butter producers and industry and consumers widely recognise the value of dairy products of New Zealand origin,’’ Jian said, adding that in China in particular consumers were “looking to improve and diversify the application of butter products in baking, cooking and desserts”.

“In future, demand for butter production and processing of Yili and Yili subsidiary brands will be considerable, and the upgraded Westland plant will play an important role.”

Westgold and Westland-produced butter is already sold in more than 20 countries around the world, including the US, Japan and China, but a large part of this supply currently was bulk commodity butter.

The plan to increase global market penetration of Westgold butter dates back to 2017 but configuration of the old butter plant had kept retail butter production capacity capped. The overhaul would increase Westland’s consumer butter production to a total of 42,000 tonnes a year, according to chief operating officer Richard Hickson.

“We will be replacing the existing single churn that was commissioned in 1978 with two German-built churns. These will offer greater quality control and production efficiencies,’’ Hickson said.

“New packaging lines will also allow us to package different formats and, at the back end, we’re upgrading palletising to give us greater efficiency, speed and stacking combinations to suit the varying requirements of international markets.

“Remote stacking and racking capability will also be built into a cool store upgrade to allow for quick recovery of palletised goods for transport.’’

Site works, construction and installation was expected to begin shortly before Westland’s annual winter shutdown in May this year and run for three months.

Yili is the fifth largest dairy company in the world and aimed to be the third largest globally by 2025.



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