October 8, 2008

Imlay Milk Plant Signing Up Farmers


The Dairy Trust company says it has the milk flow it needs and is about to start building a milk powder plant on its site in Wanganui.

Dairy Trust is a wholly-owned subsidiary of meat company Affco. It is a new nationwide dairy industry player planning to take milk from farmers for processing as export milk powder.

Chief executive Mark Fankhauser said there were surveyors at work on the Wanganui site and he expected earthworks to begin in the next few days.

He said unlike some other companies, Dairy Trust can fund the development.

"We raised capital some months ago, and we have an extremely conservative capital structure. We've made a commitment to the region and we're ready to go."

The Dairy Trust has land for the milk powder plant at the riverside Imlay meat works, owned by Affco. It will put in a concrete tower and warehouse-type building next to it.

"It will look like our Awarua plant near Invercargill. And like a very small Hawera (Fonterra) plant," Mr Fankhauser said.

Dairy Trust has had a representative out talking to farmers and he says the company has signed up dairy farmers from Horowhenua to New Plymouth.

"We've been signing up farms at a fair rate and we're happy with where we're at now. More than that, I can't tell you."

Mr Fankhauser said farmers are signing with Dairy Trust for many reasons.

"Ultimately it's a personal choice. Whether they want to free up capital, a lot are just very happy with our business model and the nature of the service we provide. There are hundreds of personal reasons."

To fill the milk powder plant, Mr Fankhauser said Dairy Trust would like to have 30,000 cows.

"Really, 22,000 to 23,000 cows. But we do feel very confident, by Christmas, we'll be at about 30,000 cows. I'm guessing that is in the mid 70s in terms of the number of farms."


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