QUESTIONS & ANSWERS

Who is behind Mataura Valley Milk?

We are a group of local and overseas investors, including James Williams, a South Island businessman, and Singapore-based businessman, Chris Shelley. Our advisors include leading dairy professionals John Shaskey of Global Dairy Network and Max Parkin, former CEO of Southland Dairy Co-operative.

Why is Mataura Valley Milk coming to Southland?

We are excited about coming to Southland because the region has had 10 per cent compound growth in milk supply over the past nine years and we expect this trend to continue given the high level of conversions currently underway. The investment climate in the region is also very favourable and we have been greatly encouraged by the welcome we have received from local government and others in the region.

How will this be good for farmers?

MATAURA VALLEY™ offers farmers compelling benefits:
•    We will not require new conversions or existing players to invest in shares to obtain a good price for their milk. The price we pay farmers for milk is not linked to whether they are a shareholder.
•    Farmers planning to convert to dairy can focus on developing their farms without the need to raise excessive capital.
•    Existing suppliers can release capital to pay off debt or purchase more land and increase milk production, thereby raising income.
•    We will pay our farmers promptly and our purchase price will be highly competitive.
•    Farmers will get greater certainty since they can supply MATAURA VALLEY under long term contracts which are backed by long term contracts with our global customers.
•    MATAURA VALLEY is targeting valuable export markets, which offer the best opportunity for farmers to achieve consistently good returns with less volatility.

Why should farmers put their faith in MATAURA VALLEY?

Rising world-wide demand for dairy products means New Zealand can process greater quantities of milk into high value products. Southland can depend on us to make the best of that opportunity. We have extensive experience around the world in developing and managing sophisticated manufacturing operations and marketing products, especially in the food and beverage sectors. We also have links with Asian and Middle East markets where the demand for dairy products is growing rapidly.

How can this be good for New Zealand when you are competing with Fonterra?

MATAURA VALLEY represents what New Zealand needs more of – investment, innovation, skilled jobs, added value and exporting. Competition will be good for the region. Our market analysis shows that smaller, independent dairy companies are providing sustained, superior returns to milk suppliers at or above the industry benchmark. There is also plenty of milk supply coming on-stream over the next five years. This, coupled with rising world-wide demand for dairy products, means there is room for another processor.

How will you get enough milk when Fonterra's Edendale plant is expanding?

We offer farmers compelling advantages over existing processors, because farmers can supply us and free up capital to expand their production. In addition, we expect continued double digit expansion of milk supply in the plant’s catchment area over the next five years, as the high level of conversions continues.

Why will this be good for the Southland economy?

By supplying MATAURA VALLEY existing dairy farmers, now tied with an existing processor, can free up capital, while those converting to dairy can avoid any heavy investment in buying shares. This means they have more funds to expand their production and to make other investments. That will benefit the region. The proposed plant will also provide a significant boost to Gore by employing about 200 construction workers, about 45 highly skilled dairy technicians and support staff once operational and from the other services MATAURA VALLEY will need, such as transport.

What are the functional milk powder products you will supply?

Highly functional milk powders appeal to discerning customers in premium market segments who are looking for increased solubility and dissolving properties. The specification of our milk powder products will vary according to many factors. Obviously MATAURA VALLEY's specifications are commercially sensitive. However, our potential global customers need a variety of different milk powder products to supply high value market segments around the world. In particular, they need processors who can supply milk powders of a consistent and reliable quality on long term contracts. That is MATAURA VALLEY's advantage.

How will you protect the river adjacent to the proposed plant?

We will be using leading edge waste treatment processes including the recycling of water because MATAURA VALLEY is very conscious of the pristine value of local rivers. We take our environmental responsibilities very seriously. We are committed to best practice environmental management.