Synlait sets out formula

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By Maureen Bishop

Synlait Milk’s plant at Dunsandel will be the world’s largest site producing infant formula when further expansion is completed in three years.

Speaking at a conference held at Lincoln University last week which considered how to attract people into land-based industries, chief executive John Penno said $500m had already been spent on the plant and a further $300m would be spent over the next three years.

Chinese company Bright Dairy is Synlait’s largest shareholder.

Mr Penno warned that the dairy industry was at major risk of ending up with too much asset – with too much processing plant.

The biggest risk in the infant formula market was food safety, Mr Penno said.

Synlait had deliberately distanced itself from the New Zealand brand, he said, preferring to be known for “who we are and what we do”.

New Zealand’s clean, green image was not a selling point.

“We don’t have a monopoly on beautiful clean, green places,” he said.

New Zealand had no advantages over Australia, Italy, the Netherlands and other European countries, Mr Penno said, but the country acted as if it did and people should pay because of it.

Instead, people were prepared to pay for food which could show its production looked after animals, the environment and people.

By the end of the year a third of Synlait farmer suppliers would be independently certified as best practice operators. Synlait pays a 25c premium per kilogram of milk solids for milk produced by grass-fed cows.

Mr Penno said he did not believe there was a shortage of skills or people to build business in New Zealand.

“We have a shortage of businesses to compete for people with the right skills.” We are saying our businesses are not sufficiently strong to compete for the right people.”