Westland Milk will spend $40 million upgrading its butter manufacturing plant as it looks to enter new international markets with its products.
The West Coast dairy company, which was bought by China-based global dairy giant Yili for $588m in in 2019, wants to move from being a supplier of mostly bulk milk commodities to more of a supplier of consumer goods.
"The investment highlights the important role Westland plays in Yili's ongoing plans to supply international industrial and consumer markets,'' said Shiqing Jia, resident director of Westland.
"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.''
The company hoped to capitalise on the expected increase in global sales of butter and spreads from $US44 trillion to $US59 trillion by 2025.
Westland said its ability to expand its retail butter exports had been limited by a cap in production, caused by the size and layout of its manufacturing facility, and the $40m upgrade would increase production to a total of 42,000 tonnes a year.
"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 what we supply currently is bulk commodity butter,'' Westland's general manager of marketing and sales Hamish Yates said.
"This investment now gives us the flexibility to pursue markets that will offer Westland the most value.''
Work on the manufacturing plant is expected to start by May and take three months to complete.