‘Industry, Company & Plant Profiles’ (April 2009)
Report # 8 in dairymark.com’s ‘Target business opportunities’ series of publications
Dairymark.com has published a report entitled ‘Dairy Spray drying in Oceania – Industry, Company & Plant Profiles’. This report provides a comprehensive industry, company and plant overview for companies in N.Z. and Australia that produce milk powder products (skim milk powder, wholemilk powder, buttermilk powder).
Whilst this report is tailored more for equipment and machinery suppliers, there has been considerable interest from industry participants because of the ‘intelligence’ it provides, and especially the following key features:
- A discussion on the global milk powder industry, including the role that Oceania (NZ, Aust) plays in this industry
- Global production trends & forecasts for SMP, through to 2018 including trends for 5 major country producers
- Global production trends & forecasts for WMP, through to 2018 including trends for 6 major country producers
- Global production trends & forecasts for BMP, through to 2018, including trends for 4 major country producers
- Detailed plant profiles, identifying each drier on each site – both in NZ & Aust (including capacity, drier type, drier make, date built, type of atomizer, etc)
- The status of all the planned new driers to be installed in NZ over the next few years, including what is known about location, drier type, drier make, date built, type of atomizer, etc
The following is summarised from the report:
Spray drying is an important aspect of the global dairy industry. Despite its small role in total world milk production (3.8% volume share) Oceania is a major player in terms of milk powder production, accounting for an estimated:
- 11.1% of international SMP output in 2008
- 212% of global WMP production in 2008
- 52.5% of international BMP production in 2008
This strong orientation towards milk powder production by Oceania is traditional – it relates to the fact that N.Z. exports 93.7% of national milk production, and Australia exports 52.5% of its milk output (in LME terms). As milk is a highly perishable commodity, the milk must be converted to a form that is able to be shipped to distant markets without unduly compromising quality. Milk powders offer one such option.
Global production of milk powders has been growing steadily over recent times. Quite apart from the current downturn in production, partly attributed to the international market contraction and implicated by China’s melamine crisis, and to the adverse climatic conditions (especially in N.Z., Australia and Argentina) of recent years, there is a strong and widely held expectation that there will be a return to growth in global milk powder production. Indeed, production projections are given in the current report that point to:
- Global SMP output achieving around 4 million mt by 2018
- Global WMP production achieving 5 million mt by 2018
- BMP output climbing to 160,000 mt by 201
Oceania is expected to play a role participating in the growth of the global milk powder industry. However, the situation could likely be quite different for N.Z. versus Australia. More particularly, the dairy industry in Oceania is undergoing fundamental change – the change is quite distinctively different amongst these two players. The two primary aspects of this change include:
- On the one hand devastating drought has struck Australian dairying over successive seasons – decimating milk production and product availability for export, with producers currently nervous about re-building their businesses, especially with the downturn that has occurred since mid-2008 in global dairy commodity prices and international market demand …
- On the other hand we have a New Zealand dairy industry that has been boldly re-structured with the assistance of enabling legislation to deliver economies of scale through the formation of Fonterra Co-operative Group such that a sustained long-term position can be achieved in global markets. A condition of Fonterra’s establishment is caught up in the Dairy Industry Restructuring Act 2001 which requires Fonterra to supply up to 400 million litres of regulated milk per year, at a default price, to other independent milk processors to ensure that small processors are not forced out of the industry and/or prohibited from entering the industry. As shown in the current report, this has given the initiative to a host of greenfield dairy plants becoming established throughout New Zealand in recent years, including ambitious plans for further expansion …
Click here for full details of the report.