Rumours that have been rife about NZ Dairies ownership issues, have finally come to a head and the factory is offically up for sale.
Lots of overseas investors have looked at putting in a bid for the newly developed site, but many have decreed it's too small.
Extra capital is needed for a second drier to fully utilise the infrastructure of the existing plant.
This development could go the full circle with the latest group to be interested in putting in a bid, are the 30-40 suppliers to the plant.
A split evolved in the original company from some of the original shareholders and suppliers, when a major shareholding was sold to the Russian owners after costs spiraled in building.
Now is their chance to buy the company back and return it to its original owners. It will be interesting to see if the sale can be achieved at a discount from the increased costs it took to be developed.
Farmers supplying milk to New Zealand Dairies' South Canterbury factory will make a bid for the plant, which is being sold by its Russian owners. Sources have revealed potential overseas buyers looked at buying the Studholme plant, but found its five-tonne-an-hour milk drier too small given the sale price being asked by Nutritek Overseas Ltd reports The ODT.
An extra $40 million to $50 million needed to be invested in a second drier to take production to 10 to 12 tonnes an hour, said a source, who asked not to be named. He said the 40 or so suppliers to the company would make their bid in the coming weeks, offering an undisclosed price but one that reflected the new capital required.
Nutritek chairman Richie Smith confirmed yesterday the Studholme factory no longer met the company' s long-term strategic plan, and it has employed Morgan Stanley to advise on its sale. Rumours have been circulating for months New Zealand Dairies Ltd (NZDL) was for sale. After a review of its global operations, Nutritek had decided to focus on the domestic Russian market, Mr Smith said. The factory processes 200 million litres of milk a year sourced from Timaru to Oamaru to produce 30,000 tonnes of powder and employs 65 people.
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