Maori dairy venture raises supply stakes

08-02-2010 | Richard Rennie

Maori-owned Miraka Limited wants to build a milk processing plant at Mokai, 30km north-west of Taupo.

The company has applied to Environment Waikato for groundwater take and wastewater discharge for the facility.

Miraka partners Wairarapa Moana Incorporation and Tuaropaki Limited are already dairy farmers in the region, running 10,000 cows between them.

The capacity of the proposed plant suggests Miraka will be seeking milksolids from other sources in the Central North Island.

The Environment Waikato consent application says the plant will be capable of processing 1.3 million litres of milk a day at peak, or supply from about 50,000 cows.

The factory sits in a catchment that could also supply "Maori milk" from further north around Rotorua and from other Tuwharetoa-owned land in the region.

Landcorp farms 9000 cows around Reporoa and Taupo on conversion properties and shapes as the most obvious non-Maori source of milk.

The SOE has ditched Fonterra in the past to use independent processors. Open Country Dairy takes milk from the SOE's dairy units on the Hauraki Plains.

Landcorp chief executive Chris Kelly is not ruling out supply to the Miraka factory.

"We are talking, that is all I will say at this stage, but we are not averse to looking at their proposal."

The project would depend on the company coming up with a robust pricing mechanism that would satisfy both suppliers and investors.

"I understand they are looking at significant offshore investment. Many Maori entities are asset rich and cash poor and raising debt can be an issue."

Kelly said Landcorp had been in contact with the Federation of Maori Authorities and he could see the benefits that could be gained by having a processing plant close to Maori land bases.

The plant would be eligible for some supply through the Dairy Industry Restructuring Act raw milk rules. PGG Wrightson Maori Agribusiness manager Clinton Hemana estimates this could account for the equivalent of 12,000 cows.

Added to the 10,000 base supply and milk from other Maori units to the north "it would not take long to reach 50,000 cow equivalents".

There was also an estimated 50,000ha of land still in forestry ceded to Maori under the 2008 Tree Lord deal suitable for dairy conversion as forestry leases expired in coming years.

Hemana is pleased to see the joint venture getting underway. He maintains the move to processing and marketing milk is indicative of the underlying unhappiness felt by many in Maoridom at Fonterra's direction and its relationship with Maori shareholders.

Maori landowners comprise 100 million shares in Fonterra and include large players like Taranaki's PKW Farms Limited with 14 dairy units.

"The Federation of Maori Authorities (FOMA) dairy cluster has long battled for better Maori representation, but been told that sector representation at a board level can't happen. Rather than get angry, Maori have decided they will have to do it themselves."

Hemana also sees processing as a step towards achieving Tino Rangatiratanga, or self determination.

"Maori have been seen as a sleeping giant for some time and this is them coming to life, it is the next step for to pursuing their own path."

The Maori groups involved wield considerable economic clout in the Taupo region. Tuaropaki has ownership of the Tuaropaki geothermal power station at Mokai, horticultural greenhouse production, dairying and beef operations.

Wairarapa Moana Incorporation is a big player in Maori milk supply with 2870ha in dairying producing 2.5 million kg milksolids. The group also controls 6500ha in forest and 1300ha in sheep, claiming assets of $150 million.

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