Westland processes Fonterra milk

Westland Milk products’ $15 million investment in a new warehouse in Canterbury has started to bear fruit as the Hokitika-based co-operative yesterday took delivery of its first trainload of raw Fonterra milk.
The milk arrived by rail after being delivered to the Rolleston warehouse as part of the Dairy Industry Restructuring Act, which allows independent dairy companies to take up to 50 million litres of Fonterra milk.
Westland Milk chief executive Rod Quin said the board had declined to take up the offer of Fonterra milk in the past as it thought it may damage the relationship between the two co-operatives.
“But with so many other companies taking up the offer it was more of a commercial decision. It will add value to our shareholder payout and allow us to produce more product to sell to our customer base.”
The influx of the raw milk would also keep Westland’s fixed costs down and allow more milk solids to be processed, Mr Quin said.
Westland Milk’s first priority remained its dedication to “encourage West Coast milk growth”.
“This was just an opportunity that presented itself.”
General operations manager Bernard May said the capacity of the new Rolleston facility would now enable the company to rail in 180,000 litres of milk on 10 rail pods every day.
More finished product could also be sent out by rail.
“The ability to have a hub in Canterbury means that we can use it as a depot for Fonterra to deliver to.
“The recent agreement with Kiwi Rail means that we now have the capacity to transport our finished product more cost effectively. At peak, up to 30 wagons a day will be transported to Canterbury,” he said.
Meanwhile, Mr Quin said the milk season was off to a good start in Westland.
“We are expecting a reasonably strong season. There was a strong first-week showing and we are expecting that to continue.”