We are not getting a new dairy plant

Fonterra’s governance review needs to be far reaching and not get bogged down by the size of the board.

A lack of understanding of the South Island’s geography was never more clearly demonstrated than on radio yesterday morning.

During a talk show discussion between Paul Henry and Massey University rural business expert, James Lockhart, there was discussion on dairy company Fonterra’s plans to ditch around 1600 of its suppliers as it struggled to prune costs against falling global dairy prices.

The discussion then moved on to debate the merits of a massive new dairy processing plant in Ashburton that would consume a quantity of water equal to that consumed in the Indonesian city of Jakarta.

The timing of the plant was slammed, but it was made clear that the complex was well down the planning track and that it would be sited in Ashburton.

That news was a surprise to Ashburton Mayor Angus McKay.

“Why would they be building a plant halfway between Darfield and Clandeboye?” he said.

“Hand on heart, I’ve never heard a thing about this.”

Fonterra did have a truck park site in the council’s North East Business Park, but this was used for nothing more than transfers between vehicles, Mr McKay said.

Fonterra media consultant Connie Buchanan was quick to squash the rumour.

“We do not have a new plant planned for Ashburton; I can only assume they mean the plant at Studholme,” she said.

Mr Lockhart was also quick to shed light on the issue.

“I deliberately used Ashburton because no-one south of the Bombay Hills would have any idea where Studholme was. The dilemma with this type of audience is that you have to pinpoint a place on the map,” he said.

“People recognise Ashburton, so I opted to use that.”

He might have got the location wrong – by around 120 kilometres – but the argument against extending the dairy factory was still valid, Mr Lockhart said.

“This couldn’t be coming at a worse time. We can’t see why they’d think this was a good idea, given the last two or three years their captive market of new milk is declining.”

Fonterra has been through a hearing on its plans to expand its Studholme plant. This is anticipated to cost around $600 million and will create about 125 jobs.

A decision on the outcome of the hearing is not expected until about June 23.

By Sue Newman