Oceania Dairy Limited has signed its first milk supply agreement for its new $214 million Glenavy dairy factory. Oceania Dairy Limited is a wholly owned subsidiary of Inner Mongolia Yili Industrial Group (Yili), China’s largest dairy company.

The state-of-the-art Glenavy processing plant has been designed for the production of milk powder for export to China where it will be used by Yili to produce infant formula.

The agreement was signed with factory neighbours and local dairy identities Aad and Wilma van Leeuwen, representing a group of Foundation Suppliers covering 20 individual dairy farms.

“Oceania Dairy is delighted to have contracted Aad and Wilma as our first milk suppliers for the new plant,” said Aidan Johnstone, Oceania Chief Executive Officer.

“They are industry leaders and excellent farmers. They typify the sort of suppliers that we are looking to work with,” he said.

Oceania will contract with up to 40 local farmers for the 2014-15 supply season to deliver 130 million litres of milk. As the factory moves to full production capacity by 2016-17 it will process 300 million litres per year. That will generate 47,000 tonnes of powder for export each year.

The factory will employ approximately 70 permanent staff when complete, with the majority expected to be recruited locally.

“We are proud to be the inaugural suppliers to Oceania Dairy Limited,” said Aad van Leeuwen.

“South Canterbury boasts some of New Zealand’s largest and most productive dairy farms, run by progressive farmers.

“Oceania Dairy, with a world-class processing plant and strong ownership structure, offers local farmers with choice and opportunity.”

“This is a real shot in the arm for the local economy,” he said.

According to Aidan Johnstone, local Oceania suppliers will enjoy the long-term support of a significant international dairy company.

“Oceania’s milk suppliers have the security of knowing that they are contributing to a first-class product being provided to a substantial and progressive single end-user client.

“That provides suppliers with security and confidence to invest in their businesses,” he said.

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