Government Provides $ 10 Million to Westland Milk for High Value Products

The government provided a loan of $ 9.9 million to Westland Milk Products to help it build a plant to separately process several types of quality specialty milks into high value products.

The terms of the interest-bearing loan have not been disclosed, Regional Economic Development Minister Shane Jones, declaring them confidential.

In total, the plant under construction at Hokitika's co-operative headquarters on the west coast will cost $ 22 million.

"With Karamea's suppliers to the glaciers and its 430 employees in Hokitika, an investment in Westland Milk Products, owned by New Zealand, is an investment in the economy of the entire West Coast," said Mr. Jones. .

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Toni Brendish, Managing Director of Westland, said separate specialty milk production was a key part of Westland's five-year strategy.

"Westland needs to reduce its reliance on bulk dairy products because of their volatile price cycles, and we will do so by increasing our ability to produce high-value products, differentiated by the special qualities of the milk used in the process. manufacture.

"This will include A2 milk and our new standard premium Ten Star milk.It is also possible, in later phases of the project, to combine other products such as pure milk fed to the grass, milk pure jersey, goat or sheep milk or even nutrition, "said Brendish.

National Primary Industries spokesman Nathan Guy questioned the loan.

"It is alarming that the Shane Jones Provincial Growth Fund has become a bank, and this loan sets a dangerous precedent: many New Zealand dairy companies are doing without any government loans."

As Minister, in recent years Guy has overseen the Primary Growth Partnership Program. One of the projects she was involved in was developing technology that would allow Fonterra to make mozzarella in one day.

A spokesman for MPI said the amount of taxpayer spending for the project was commercially sensitive, but that the funds had not been used to build the plant for $ 260 million.

The total spending on the PGP dairy program – which included a dozen other projects – was $ 162.7 million, to which the taxpayer had paid $ 81.7 million over seven years.

However, Guy said the PGSs were a targeted partnership fund for innovation and value-added, with strict criteria, coupled with public reporting and a 50/50 split between government and the private sector. The Provincial Growth Fund report was "woolly", he said.