Pa¯mu Farms in­vest­ing in spe­cial­ist milk spray dryer

Waihi Leader - - News -

Pa¯mu Farms, Land­corp Farm­ing Lim­ited’s brand, has taken a 35 per cent stake in a spe­cial­ist spray dry­ing fa­cil­ity to be built at the In­no­va­tion Waikato Park, in Hamil­ton.

The in­dus­trial spray dry­ing fa­cil­ity will con­vert liq­uid milk into a dried form, and has a 1.2 met­ric tonne per hour dry­ing ca­pac­ity. Con­struc­tion will be led by Te­tra Pak and is de­signed to meet the strictest in­fant milk for­mula man­u­fac­tured stan­dard, with cus­tomers across the sheep, goat, cow and spe­cialty in­gre­di­ents sec­tors.

Com­ment­ing on the in­vest­ment, chief ex­ec­u­tive Steven Car­den said the in­vest­ment will sup­port Pa¯mu’s strat­egy of adding value both within and be­yond the farm gate.

“For the last five years Pa¯mu has been pur­su­ing a strate­gic ap­proach aimed at fu­ture proof­ing the com­pany by di­ver­si­fy­ing our earn­ings po­ten­tial, and help­ing mit­i­gate the com­mod­ity cy­cle that holds the com­pany hostage to some ex­tent. This in­vest­ment fits with this strat­egy, and we ex­pect ¯ O it to con­trib­ute to the grow­ing earn­ings and fi­nan­cial re­silience of Pa¯mu in the years ahead.”

Mr Car­den said the in­vest­ment was also pos­i­tive for New Zealand’s grow­ing and award-win­ning sheep milk in­dus­try.

“The fa­cil­ity in­vest­ment will pro­vide an ad­di­tional op­tion for dry­ing the milk from our Spring Sheep joint ven­ture, at a time where ca­pac­ity for such spe­cial­ist fa­cil­i­ties is se­verely stretched.

“We will also be able to ac­cess our share of ca­pac­ity in the dryer for pro­cess­ing other spe­cial­ist milks, such as our pure or­ganic milk pow­der, which we are about to start sell­ing in China.”

Mr Car­den said the in­vest­ment stacked up from both a fi­nan­cial and strate­gic per­spec­tive, but was also a pos­i­tive step for the en­tire New Zealand pre­mium milk sec­tor.

“New Zealand has plenty of big dry­ers for com­mod­ity milk. What our coun­try has lacked has been smaller, spe­cial­ity dry­ers that can man­u­fac­ture small scale, nov­elty milks.

“Pa¯mu is proud to be part of se­cur­ing this ad­di­tional ca­pac­ity. Hav­ing a New Zealand com­pany with a sig­nif­i­cant in­ter­est in a fa­cil­ity like this is good for the New Zealand agri­cul­ture sec­tor be­cause it al­lows fur­ther di­ver­si­fi­ca­tion of land use. That means more op­tions about what farm­ers can do on their land. With en­vi­ron­men­tal re­stric­tions in­creas­ing in the Waikato, that’s more im­por­tant than ever be­fore.”

Mr Car­den said that any ca­pac­ity that Pa¯mu or its JV part­ners did not use can be on­sold to other users, pro­vid­ing a world class man­u­fac­tur­ing fa­cil­ity to NZ’s grow­ing al­ter­na­tive and spe­cialty milk sec­tors.

“This is re­ally good news for the Waikato re­gion, which is the cen­tre of our sheep milk­ing and or­ganic milk op­er­a­tions. “

Pa¯mu’s 35 per cent stake in Melody Dairies Lim­ited, which will own the dryer, is be­ing fi­nanced through ex­ist­ing bal­ance sheet ca­pac­ity and is val­ued at $11 mil­lion.

Pa¯mu joins three other part­ners in the dyer in­vest­ment — New Zealand In­no­va­tion Waikato (10 per cent), Dairy Nu­traceu­ti­cal Lim­ited (20 per cent) and Nu-Mega In­gre­di­ents (NZ) Lim­ited (35 per cent).

“Pa¯mu has had a strong work­ing re­la­tion­ship with New Zealand In­no­va­tion Waikato over the last few years and we’re ex­cited to be­gin our part­ner­ship with Dairy Nu­traceu­ti­cal Lim­ited and Nu-Mega — two im­por­tant play­ers in high-value dairy man­u­fac­tur­ing. We are pleased we can help keep a size­able piece of this im­por­tant re­gional in­fra­struc­ture in New Zealand own­er­ship.” Mr Car­den said.

Chair­man of Spring Sheep Michael Ahie wel­comed the in­vest­ment.

“Spring Sheep is grow­ing as we see global cus­tomers start to recog­nise the unique taste and prop­er­ties of our milk, and the prove­nance of the prod­uct. This in­vest­ment will help se­cure the fu­ture of Spring Sheep as we add value to our com­pany in the agri­cul­ture sec­tor.” Mr Ahie said.

A di­rec­tor of In­no­va­tion Waikato, and for­mer CEO of Dairy Goat Co­op­er­a­tive, Dave Stan­ley said hav­ing Pa¯mu as a corner­stone share­holder was crit­i­cal to the suc­cess of the dryer.

“As in­no­va­tors in farm­ing, we value Pa¯mu as a share­holder. With their in­vest­ment in Spring Sheep, or­ganic milk and even deer milk — they are com­mit­ted to driv­ing in­no­va­tion in agri­cul­ture, which is also what the Waikato In­no­va­tion hub is all about.

“From a re­gional per­spec­tive, hav­ing the com­mit­ment of our largest farmer in this dryer and this re­gion is very im­por­tant,” Stan­ley said.

Con­struc­tion of the spray dry­ing fa­cil­ity is ex­pected to start this month, and is due to be on line by Novem­ber 2019.

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