Westland gains in New Zealand

Fonterra’s 90% share of the New Zealand raw milk market may see a bit of erosion, as smaller processors such as Westland and Synlait continue to add farmers to their networks. Along with Open Country Dairy, Tatua Cooperative Dairy and Mirako, they also buy around 600 million litres of regulated milk from Fonterra.

That being said, Fonterra processes 16 billion  litres of milk per year. It recently also said it will spend $235 million (€142.7m) for a third dryer at Pahiatua, North Island, which will process 2.2 million litres per day when at capacity.

Pricing continues firm due to demand from China and across all key markets, with processors in New Zealand offering “potentially record level” payouts for milk solids, according to Westland. It is New Zealand’s second largest dairy co-operative and has added 20 farms to its network in the Canterbury, New Zealand area, which now accounts 18% for the processor’s total milk supply. Westland has also invested in a new nutritionals plant, which was was commissioned at the beginning of 2013.

Chief executive Rod Quin says this is now paying dividends for the company: “Infant formula demand remains very strong particularly in China despite recent events. The Chinese government continues to push consolidation in their domestic supply base and new registrations are required for importers. But Westland is well positioned to work within these new rules and take advantage of the surging demand, thanks to our relatively high milk growth and the wider range of product options we have available as a result of our investments in recent years.”