Yili’s Westland to spend $40 million on lifting butter production

Yili’s Westland Milk plans to spend $40 million on doubling its consumer butter manufacturing capacity at Hokitika.

The plan has been five years in the making and is backed by Yili, which bought the then debt-laden Westland Milk for $588m late in 2019.

Resident director Shiqing Jian said Westland was transitioning from a supplier of mostly bulk commodities to play a greater role in the production of consumer goods in an expanding global butter and spread market.

“The investment highlights the important role Westland plays in Yili’s ongoing plans to supply international industrial and consumer markets,” Jian said in a statement.

Annual global butter and spread sales are predicted to grow from a current estimated US$44 trillion ($61.9t) to US$59t by 2025 with the US, Russia and China regarded as the world’s largest importers of butter.

“New Zealand is one of the world’s major butter producers and industry and consumers widely recognise the value of dairy products of New Zealand origin,” he said.

“Chinese consumers are also continuously looking to improve and diversify the application of butter products in baking, cooking and desserts,” he said.

“In future, demand for butter production and processing of Yili and Yili subsidiary brands will be considerable, and the upgraded Westland plant will play an important role.”

Westland’s general manager of sales and marketing Hamish Yates said Westland would leverage the West Coast’s reputation “as one of the mostunique dairy catchments in the world”.

Westgold and Westland-produced butter is already sold in more than 20 countries around the world, including the US, Japan and China, but a large part of its production is in bulk commodity butter.

The plan to increase global market penetration of Westgold butter began in 2017 but configuration of the old butter plant had kept retail butter production capacity capped.

The investment would give Westland the flexibility to pursue markets that will offer Westland the most value, and will increase Westland’s consumer butter production to a total of 42,000 tonnes a year.

Westland will replace its existing single churn – commissioned in 1978 – with two German-built churns.

Site works, construction and installation is expected to begin shortly before Westland’s annual winter shutdown in May this year and run for three months.

Westland was Yili’s second major investment in New Zealand.

The first was South Canterbury’s Oceania Dairy, which it bought in 2013.

It has since invested $650m in establishing Oceania’s milk powder, infant formula and UHT production lines.

Source: Read Full Article