Southland oat milk producer receives $6 million for facility

A dairy farmer secures a government loan of up to $6 million to develop a plant-based beverage manufacturing plant north of Invercargill.

When completed, the $50 million carbon-neutral processing plant in Makarewa will be able to produce up to 80 million liters of plant-based milk a year, Regional Development Minister Stuart Nash said.

He said the loan to low-emission oat milk maker New Zealand Functional Foods would come from the Regional Strategic Partnership Fund – the successor to the Provincial Growth Fund.

The $200 million fund aims to grow regional economies by helping people develop projects specific to their communities.

Nash said local production of oat milk is a “lucrative” way to strengthen New Zealand’s position as a food producer.

“Plant-based milk alternatives are a rapidly growing segment of domestic and international consumer markets, with the amount Kiwis spending on plant-based milks nearly tripling, from $52 million in 2017 to $144 million. million in 2019 – so the demand is definitely there.”

Nash said New Zealand currently lacks the “appropriate processing facilities” to manufacture the large volumes of oat milk needed to make ripples in the growing market.

“We know that oats grow well in the Southland and use little water, land use and emissions, they make a great raw ingredient for an environmentally sustainable alternative milk option.

“Producing oat milk locally is a lucrative way to diversify our strength as a quality food producer.”

The funding comes as the government attempts to help the Southland region shift from its reliance on the Tiwai Point aluminum smelter, which is set to close some time after 2024.

The foundry directly employed 1,000 people and created a further 1,600 indirect jobs in Southland.

Proposals for a $700 million data center and green hydrogen plant are also on the cards for Southland after the Tiwai smelter closes.

Three other projects have received support from the Regional Strategic Partnership Fund since its launch in May 2021. Among the companies that have tapped into the fund is the plant-based meat replacement company Sustainable Foods Ltd, which received the approval of a loan of up to $1.25 million.