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CLIENT NEWS: Melody Dairies breaks ground on $50M spray dryer to meet sheep milk export demand

Melody Dairies began construction of its new spray dryer on the campus of the Waikato Innovation Park this month.

The new $50 million industrial spray dryer will sit alongside the existing Food Waikato dryer and will have 2.4 times its capacity at 1.2 tonnes of powder per hour. The dryer will be operational by February 2020 and will grow employment at the plant from 17 to 35 staff.

Burgeoning global demand for sheep milk products is the impetus behind the new project. 

Melody Dairies’ four investment partners are jointly financing and building the new spray dryer, which will be managed by Food Waikato. The four partners in Melody Dairies are:

  1. Nu-Mega Ingredients (NZ) Limited, a company owned by Australian Listed Clover Corporation Ltd, with a 35% stake in Melody Dairies;
  2. Landcorp Farming Limited (Pāmu), with a 35% share in the partnership;
  3. Dairy Nutraceuticals Limited, with a 20% share; and
  4. Food Waikato, also known as New Zealand Food Innovation Waikato, with a 10% share.

Commenting on the start of construction, Pāmu Chief Executive Steven Carden said the investment will support Pāmu’s strategy of adding value both within and beyond the farm gate. 

“For the last five years Pāmu has pursued a strategic approach aimed at future proofing the company by diversifying our earnings potential. This investment fits with this strategy, and we expect the dryer, when completed, to contribute to the growing earnings and financial resilience of Pāmu in the years ahead.” 

Pāmu, is a shareholder of Spring Sheep Milk Co., a boutique advanced nutrition company which exports high-value branded nutrition food products made from sheep milk

Spring Sheep Milk Co. CEO Scottie Chapman says, “The global sheep milk industry is estimated to be worth $8 billion USD at the farm gate and $30 billion USD at retail. The segment is experiencing strong growth on the back of increasing demand for alternative dairy.

“Asia is currently the largest consumer of sheep’s milk, and demand there is increasing as a high proportion of the population is intolerant to cow’s milk.”

Sheep milk is an ancient milk that has been around for millennia and remains popular in Europe particularly in France, Greece, Spain, Netherlands, Sardinia and the Middle East.

Around the world, sheep milk is predominantly consumed as cheese. However increasingly it is evolving into other products such as yoghurts, liquid milks, butter, ice cream/gelato, nutritional foods and beverages.

“It’s a new era for sheep milk. People are starting to see how its digestibility, nutrition and taste attributes make it ideal for many different products.

“We’re seeing a growing demand for high quality alternative milk due to dairy intolerance and dairy protein allergies, as well as heightened awareness around health and wellness in APAC region,” says Mr Chapman.

The Spring Sheep Milk Co. product range currently includes advanced nutrition powders and chewable tablets. The company is also developing a premium range of early life nutrition products.

“There are a number of high-value nutrition product lines that we will develop in the new Food Waikato plant,” says Mr Chapman.

The opportunity for a sustainable sheep milking industry in New Zealand has recently arisen due to the availability of high-performance genetics.

“Prior to imported genetics, on average ewes would only produce 100-150 litres each per season which made the model economically challenging for farmers. A good return, however, is now possible using imported genetics coupled with the right farming systems.  

“For example, ewes on our pilot farms have set records this year, with our first generation of European ‘elites’ on target to achieve over 300 litres as hoggets. Once fully grown they will achieve 400 litres.

“These results are promising for the industry. It demonstrates sheep milking is a sustainable option for cow dairy farmers looking to switch to a low environmental impact alternative,” Mr Chapman explains.

Stuart Gordon, CEO of Food Waikato, says, “With the huge growth in this alternative dairy industry, our new specialist processing site will enable the sheep industry to go through its current growth phase and will help the industry scale to meet increasing demand. 

“Products coming out of our dryer are projected to deliver $129 million in dairy exports each year,” says Gordon.

Scottie Chapman says Spring Sheep Milk Co. is extremely optimistic about the next 12 months for the business.

“Things are looking very promising. We have several exciting product launches lined up for later this year in multiple new markets.  

“By 2030 we expect to be a $200-700 million-dollar business. Everything tells us we are on track to achieve this,” says Mr Chapman.