FACTORY GROWING JOBS: Yashili's $210 million infant milk formula plant in Pokeno will be commissioned next year.

An endless wave of activity fills the vast Yashili complex at Pokeno.

The $212 million infant milk formula factory will begin production in two months, and there is still plenty of work to be done.

The 70,000 square metre plant is complete, and systems testing is well under way. The boilers have been started, the water treatment plant is complete, and steam and electricity supply to the main plant is functioning. Importantly, input-output testing will soon be under way.

Sitting in his new office overlooking the endless activity is William Zhao, New Zealand general manager for Yashili.

He says the entire build, which started in September last year, has gone well.

"We're on budget and on time," he says.

What remains is signing a deal with a milk supplier. Zhao says Yashili is in talks with two companies and hopes to close a deal with one "soon".

A "high level" agreement with the University of Auckland has also been signed involving nutritional research and product development - all for the Chinese market. But Zhao is not ruling out a tilt at the local market in a few years.

For now, Yashili's focus is on commissioning the factory, pencilled in for February 25 next year. That could be held up by the complex compliance scheme in China that the company will need to work through before then, and also depends on getting the much less complicated compliance approval from New Zealand's Ministry for Primary Industries, says Zhao.

The build provided work for 350 when construction was at its peak, although that was now down to about 100. Those workers are joined by about 35 fulltime staff whose number will grow to 130 over the next year as the plant builds up to full production. The plant's 41-metre spray dryer will be able to produce up to 8.4 tonnes an hour, says Zhao, helping the factory to pump out 52,000 tonnes of infant milk formula a year.

The massive project is just one of those under way in the Waikato. On the eastern side of the region, the Hauraki District Council says talks are well progressed with Chinese company Allied Faxi Food Co on a planned icecream plant.

Construction should be under way early next year, and as many as 50 local people will be employed in the fully functional factory by the end of 2015.

Two more food companies are also in talks with the council about setting up shop, all good news for a small community like Hauraki, says mayor John Tregidga.

He says economic models show that for every 30 jobs brought to an area, another 12 are created. For every $66,000 spent on a project, another job is created elsewhere. All up, the Allied Faxi Food factory should generate $12m in downstream effects for the local area.

The impact is already being felt in Pokeno, thanks in part to the Yashili build, where the population is estimated to go from a few thousand to as many as 30,000 in the next two decades.

"I think New Zealanders don't actually understand the flow-on effects," says Tregidga.

"In smaller communities like ours, [big investment] can have a dramatic effect."

The mayor isn't worried about the origin of investment, either. Although Chinese investors buying up big blocks of land caused "some concern" for small communities, he doesn't think the same fear is felt over "infrastructure and buildings, because it creates jobs".

"I think that some overseas investment is really good for New Zealand," he says. After all, investors with that much money are in short supply here.

"How many Fonterras have we got in New Zealand?"

Located at Kerepehi Industrial Park between Paeroa and Ngatea, the icecream factory will use local milk to produce up to 10 tonnes of icecream each day, again for the Chinese market.

Zhao says the Waikato just makes sense for a Chinese investor, and he wouldn't be surprised to see more in the area.

"It's close to the ports of Auckland, it's close to the Port of Tauranga.

"It's a traditional dairy area and also has a good labour pool."

But a New Zealand company is getting a bite of the Waikato cherry, too. Fonterra's $120m UHT plant in Waitoa began production in March this year, providing 100 new jobs. With five production lines, the site could produce up to 100 million litres of UHT milk and cream products a year.

All of it will head to the Asian markets, including China, Indonesia, Thailand, and Vietnam.

A few hours' drive from Waitoa, in South Waikato's Lichfield, a $300m upgrade of another Fonterra factory is already under way.

Construction will provide "hundreds" of jobs in the area, according to the dairy giant, and fulltime employment for 50 when complete.

Tregidga points out that it is all a result of New Zealand's free trade agreement with China - regardless of who is building.

That means everyone is winning, so for now, it is simply time for Waikato to get on with enjoying the benefits.

- Narelle Henson

Waikato Times


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