Natural Dairy eye Otago/Southland farms

The Chinese-backed company seeking to buy 29 North Island dairy farms is also trying to buy up to 100 farms in Otago and Southland and build a dairy factory in Southland.  Greg Roberts, a consultant for Natural Dairy NZ, would not say if he had purchase contracts on any farms, but sources have told the Otago Daily Times the firm has indicative interest from the owners of farms milking about 30,000 cows. The response from southern farmers had been mixed, from being happy to consider selling to outright opposition. There are 809 dairy herds running more than 400,000 cows in Southland and 355 herds with 180,000 cows in Otago. Mr Roberts declined to say where the factory sites were, but sources have said three sites have been chosen: at Awarua, on Invercargill City Council-owned commercial land beside a plant owned by Open Country Dairy; at McNab north of Gore, where Mataura Valley Milk plans to build a plant but has yet to raise the necessary capital; and at Makarewa, north of Invercargill, the site of a former meat plant owned by the Alliance Group. Mr Roberts said the factory would be medium in size, similar to the Open Country Dairy plant at Awarua which is supplied by 94 farms and handles 200 million litres of milk from about 50,000 dairy cows a year. In comparison, Fonterra's Edendale factory can handle 15 million litres of milk a day. A Natural Dairy spokesman, Bill Ralston, confirmed the company's interest in the South, but described the approaches to farm owners as "initial due diligence", with no commitment or sale agreements until the company received a ruling from the Overseas Investment Office (OIO) on its North Island purchases. Mr Ralston said the OIO had had an initial assessment, but asked for more detail on Natural Dairy's business case.