July 2013
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Printing star on the rise - Page 25
Canty dairy farmers looking West Hugh De Lacy Reversing a history of its raw materials being plundered by businesses based on the eastern side of the Southern Alps, the farmer-owned cooperative Westland Dairy Products is mining an increasing share of Canterbury milk production. At least 35 central Canterbury milk producers have signed up with Westland, achieving the target set in the company’s four-year-old strategic plan to grow the Hokitika-based business by bringing milk “over the hill” from Canterbury. The West Coast economy has in the past been almost entirely dependent on mineral extraction, and this is the first time that a substantial and growing quantity of raw materials of any sort
has moved westward across the Southern Alps for processing, then back east again for export through Lyttelton. Canterbury farmers on irrigated land now comprise between 15% and 20% of Westland Milk’s supply base, which not only kept the factory running through this year’s late-summer drought on the normally summer-safe West Coast, but will ensure it can now run year-round for the first time. Chief executive Rod Quin said Westland Milk products intends soaking up more of Canterbury’s milk supply, and that it expects to find ready takers especially among dairy farms being developed on newly-irrigated land. “We’ve got to our target [for Canterbury suppliers] reasonably quickly, and it’s been a really positive uptake,” Quin said.
Though only 35 in number compared to the 400 West Coast members of the Westland co-op, Canterbury suppliers represent a disproportionately large slice of the company’s supply, because the average size of the Canterbury dairy herd is around 750 cows, while West Coast herds average 380. As part of its strategic plan to move into the nutritionals market, Westland recently installed a baby formula plant at Hokitika, with a view to supplying the burgeoning Chinese market. The company needs between 100,000 and 150,000 litres of milk a day to make the year-round operation economic. Quin said “a handful” of West Coast farmers had so far decided to supply year-round, committing between 40,000 and 60,000 litres a day. Canterbury suppliers would underwrite the
daily requirement, and developing the company’s investments on the eastern side of the Alps was central to its continued growth, he said. Westland already has a reverse osmosis dewatering plant at Rolleston, south of Christchurch, which halves the bulk of the milk collected by a fleet of three road-tankers, with the concentrate being railed to Hokitika. The company has also obtained resource consent to expand the Rolleston plant, though it has no plans to build there yet. Westland is an attractive start-up option to Canterbury farmers wanting to buy into a co-operative supply agreement, which in both Westland’s and giant Fonterra’s case is based on acquiring one share per kilogram of milk solids to be supplied. Westland’s share price is $1.50.
Irrigation fund established Chris Hutching A new Crown-owned company, Crown Irrigation Investments, has been set up to boost irrigation projects in New Zealand. Primary Industries Minister, Nathan Guy, says the company - which will have access to $80 million - will act as a bridging investor for regional water infrastructure projects, “helping kick-start projects that would not otherwise get off the ground”. The subsidy should help overcome the reluctance of farmers and bankers to fund the schemes. The board of Crown Irrigation Investments will be chaired by Alison Paterson, with members Don Huse (deputy), Debbie Birch, Lindsay Crossen, Chris Kelly, Graeme Sutton, and Michael Webb. Irrigation schemes likely to benefit include Central Plains Water and Hurunui Water in Canterbury as well as schemes proposed for Hawkes Bay, Nelson and Wairarapa. In Canterbury and Hawkes Bay the regional councils are preparing the way for more irrigation by raising allowable nutrient levels in the main rivers to cater for dairy run off. Central Plains Water, using water from Lake Coleridge and the Rakiaia River, has been holding meetings with shareholders to test commitment to a new capital raising. CPW chairman, Derek Crombie, says a new prospectus is yet to be registered, possibly in September. CPW supporters still want more storage of water for subsequent stages in the catchment to the north of the Rakaia and near the Waimakariri catchment.
INSIDE
From humble beginnings..... Steelbro, one of Christchurch’s oldest and most successful firms, is this year celebrating its 135th anniversary. Set up in 1878 by brothers Joseph and David Steel - with just £5 capital each - the Steel Bros Coach Factory in Lincoln Road, Addington, produced high quality horse drawn wagons, coaches, gigs and drays. In the 1930s the company was in full swing
IBM experts visit Christchurch - PAGE 2
CERA set for restructure - PAGE 2
designing and building motor bodies and by the 1960s had become New Zealand’s leading motor body building and engineering company. Over the years the company has evolved its business to meet the changing demands of the market, with its ground-breaking side-lifter, developed in the 1980s turning it into a truly global enterprise. Story page 3
Tightening up tax deductions - PAGE 4
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