Synlait partners with Foodstuffs South Island to supply fresh milk and cream
Synlait Milk (NZX: SML; ASX: SM1) is partnering with Foodstuffs
South Island Limited to become the Cooperative's exclusive supplier
of its private label fresh milk and cream from early 2019.
Synlait intends to invest approximately $125 million in an
advanced liquid dairy packaging facility to supply Foodstuffs South
The investment establishes a platform for Synlait to pursue a
range of dairy-based products for domestic and export markets in
"Combined, the partnership with Foodstuffs South Island and
investment in a new facility is a further and significant step
towards our goal of being a more diversified and balanced
business," says John Penno, Managing Director and CEO.
"We believe this opens up a new category - everyday dairy - and
has the potential to both leverage our current position and explore
new customers and markets."
"This category represents the dairy products people consume
every day. Our long-term success in this category will be based on
our ability to win customers in the New Zealand market first and
today we're taking a foundational step towards that."
Synlait's partnership with Foodstuffs South Island is strategic
for both parties.
"We are very proud of our Canterbury dairy farmers and the way
they farm. We are excited about making our farmers' fresh milk
available to everyone in the South Island, in partnership with
Foodstuffs," says Mr Penno.
Fresh milk and cream from
Synlait will be packaged in Value and Pams branded products, which
are available across New World, PAK'nSAVE, Four Square, Raeward
Fresh and On The Spot stores.
"The partnership allows the Cooperative to provide high quality
fresh milk and cream to our customers. The partnership allows us to
give our customers surety around milk supply with an innovative New
Zealand-based milk supplier," says Steve Anderson, CEO Foodstuffs
"In time, we are looking forward to collaborating with Synlait
to create a range of new and innovative dairy-based products that
our customers will enjoy."
Synlait's research and development centre in Palmerston North,
which is a collaboration with Massey University and FoodPilot, will
provide the technical new product development expertise needed to
establish, validate and deliver these capabilities at Synlait.
The expected $125 million investment in an advanced liquid dairy
packaging facility is aimed at delivering a state-of-the-art liquid
blending and packaging platform. It will allow Synlait to produce
fresh milk and cream for domestic use and the ability to pursue a
range of dairy-based extended and long-life consumer products in
"This will be one of the most sophisticated fresh milk and cream
processing facilities in New Zealand."
"By leveraging what we have learnt about milk quality and
blending dairy products in our infant formula business, we will
deliver a great facility at Synlait Dunsandel," says Mr Penno.
"Our everyday dairy category offers many B2B and B2C
opportunities in the established and growing export milk and cream
With a minimum annual capacity of 110 million litres, the
facility will be capable of producing:
- High-specification pasteurised milk and cream for domestic
- Extended shelf life (ESL) dairy products
- Long-life milk and cream for export
- Ready to drink (RTD) liquid infant formula and toddlers
- Other blended dairy-based beverage products
Mr Penno says Synlait has proven experience from establishing
and rapidly growing a successful infant formula business.
"We've demonstrated that we can introduce new capability,
manufacture world-class product, build a profitable business around
it and provide a long-term strategy for sustainable returns. This
will be no different."