Frequently asked questions

You have announced you are building a new dairy plant, who is ZOAGN and how big will be plant be?
Our company Zoagn; which has extensive experience in building dairy processing facilities, is backed by a group of major investors. The plant will be state-of-the-art milk processing and drying plant costing $100 million. The plant will have a capacity of 37,000 tonnes a year, which would be the equivalent of around 90 dairy farms supplying 220 million liters of milk a year.

Why did you choose Arapuni?
We identified Arapuni because of its geographic location in relation to neighbouring processing plants and the fact that it provides a good dairying hinterland within the optimum 50 km radius which is the ideal maximum distance for trucking milk. Arapuni also has good potential to provide housing infrastructure and education and other social facilities for families wishing to move to the area to work at the plant.

What is the estimated full production and does the country and the region really need another processing plant?
We estimate full production at 37,000 tonnes of milk powder equivalent to 220 million litres of raw milk.  The plant is needed because it will utilize the increasing local milk supply from new conversion farms and sell high end products into markets not currently serviced by existing New Zealand producers.

How confident are you that local dairy farmers will move from existing supply contracts and what numbers do you need to ensure sufficient milk supply?
The big attraction for local farmers is that they would be able to sign new contracts with us without having to invest in dairy company shares. This would enable them to sell their existing shareholdings and either retire debt or reinvest in expanding production. Also new farmers expanding their production will not have to keep acquiring capital at the same time, just increase supply and increase earnings. We believe this will be a very attractive proposition for local farmers and don’t anticipate any difficulty finding the 90 or so dairy suppliers required, in fact early enquiry is such that we expect to be fully signed up with suppliers very soon.

What about the environmental impacts on Arapuni?
Placing a relatively significant processing plant in a very small village such as Arapuni requires a high level of development and mitigation. Fortunately the site we have acquired is at the extreme North End of the town and has the advantage of a natural landscape which features raised bunds at the boundaries which will help shield the plant. In addition there will be extensive landscaping so the visual impact will be minimized. We have already identified benefits for Arapuni in terms of providing an opportunity to collaborate with the South Waikato District council on water and wastewater both of which are issues at present for Arapuni. The plant will be a net producer of water by definition and as part of our Resource consent we will be identifying methods of treatment for all plant effluent, including the potential to use worm beds to create a beneficial environmental benefit.

What are you doing for funding?
Funding is obviously a key component to a project such as this and we are well advanced in negotiations with several interested parties, so at this stage we don’t see any issues around funding.

What about the wider environmental impacts on Arapuni such as tanker traffic and wider social impacts?
We don’t see any significant traffic impacts but have engaged transport consultants and had discussions with Transit to ensure mitigation. Probably the most significant statistic is that of the approximately 40 tanker loads a day some 70 per cent will come from the North and therefore won’t have to pass through the main street. As for wider social impacts we see only benefits. We anticipate that a number of the 70 employees will want to live close to the site so there is an obvious benefit in terms of the existing real estate market. We also believe that our presence will revive some of the main street businesses such as garages, food stores, cafes etc, and that infrastructure will be important to Arapuni in terms of its involvement in the River Trail part of the cycleway from Putaruru to Rotorua.

Is your project going to have foreign ownership similar to the Russian investment in NZDL?
We are confident there will be significant investment interest within New Zealand but, like the NZ Government, we would encourage overseas investment in any future plant development.

Given that you say some of the milk will be drawn from conversion farms, does that include the major forestry conversions by the Auckland investors on land sold by the Graeme Hart interests, and will those people also be investors?
Of course we are looking closely at the supply from those farms. Any new development that has potential to increase supply significantly over the coming years is of interest to us. There is no reason why any individual couldn’t be an investor with us as long as their investment philosophy is aligned with the other shareholders.