Synlait snaps up land in Waikato

Synlait has conditionally bought

28 hectares of land in Pokeno, North Waikato, to build a $260 million infant formula manufacturing plant.

Because the Canterbury-based company has a majority Chinese owner (39 per cent), the land purchase will have to be approved by the Overseas Investment Office (OIO).

Federated Farmers dairy group chairman Chris Lewis welcomed the news of more competition, but with a warning the region might have reached ‘‘peak plant capacity’’.

Happy Valley Milk has recently been given the go-ahead to build a

17.89ha milk plant in Otorohanga, Fonterra is expanding its cream cheese plant at Te Rapa, and established players include Tatua, Open Country and Miraka. ‘‘Farmers like a bit of competition and Synlait is a good company. But within Waikato there will be no more dairy conversions, and farmers I know aren’t adding to their herds. ‘‘We are all aware of the environmental impact of dairying, and there is also competition for land from housing and horticulture,’’ Lewis said.

Synlait chief executive John Penno said the company had ‘‘done the maths’’, and come to the conclusion Waikato was one of the least competitive regions because of the ample milk supply. ‘‘We also don’t need much for the added value products we are making.’’

The company is reaching out to potential suppliers by asking them to contact them. It is especially interested in farmers who are either A2 milk suppliers or are keen to switch.