Keytone eyes China expansion

The Chinese and local owners of a Christchurch dairy packing and blending factory will seek $15 million to $20m from new investors to expand exports to China.

Keytone Dairy built a dairy packing and blending facility in Sockburn on the outskirts of Christchurch in 2013. The site packages milk powder, sheep milk powder, kiwifruit milk powder and lactoferrin under its own brands and for local supermarkets and other customers.

It joins a growing number of relatively new dairy packaging and marketing companies either owned by Chinese interests or targeting Chinese and Asian markets.

Last year Keytone bought two sites in the Izone Industrial Park in Rolleston south of Christchurch where it plans to build new manufacturing facilities to expand its product range.

Keytone co-founder James Gong, based in Burwood, Christchurch, said the company would capitalise on New Zealand’s clean, green image and the majority of dairy product would be sourced locally.

But the expansion will be funded mainly from Australian investors because a parent company will be listed in May on the Australian Stock Exchange, where Gong said it will be closer to larger sources of funds.

Its marketing and packaging rivals in Canterbury include locally owned NZ Dairy Brands, also founded in 2013, and a new packaging operation opened two weeks ago by Chinese-owned Jamestrong specifically for infant milk formula.

Keytone obtains the milk powder from New Zealand processors and packages it into its own brands including KeyDairy whole milk power, skim milk powder, colostrum powder, goat milk powder, kiwifruit powder and an antibacterial powder called Faceclear.

It also blends powders for yoghurts, ice creams and smoothies.

Examples of customers who use Keytone packaging include Woolworths (Countdown), Alpine Milk Products, Metro, NZ Delight, DairyWorks, Natural Care, IgCO, U-Than, Seperex and Kobe Beef Calf Milk Replacer.

The New Zealand-based company, Keytone Enterprises is 16 per cent owned by Gong, 34 per cent chief by operating officer Vivienne Cheung of the same Christchurch address, and 49 per cent by Shanghai-based Long Hill Capital. The shareholdings will change after the ASX listing.

Keytone Dairy Corporation is a recently registered Australian company which will seek a minimum of $15m, with $5.4m to be spent on new factory lines, and the rest split between expansion of marketing, staff and other expenses, including $1.4m for expenses of the ASX float.

The directors of the listed company will be Gong, Peter Hobman and Bernard Cavanagh of Victoria, Australia. The chief financial officer is Sydney-based Jourdan Thompson.