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Olam to set up $80m dairy plant in Uruguay

DBR Staff Writer Published 10 September 2014

New Zealand Farming Systems Uruguay (NZFSU), a subsidiary of Agri-business company Olam International, plans to invest $80m to establish a new dairy plant in Uruguay.

Of the total investment, around $5m will be used to buy 94% stake in BG Industria Láctea, in order to acquire land, licenses and permits required for the construction of the plant.

Olam International dairy, coffee and commodity financial services global head and managing director Vivek Verma said: "The proposed dairy processing investment is part of our strategy for NZFSU to realise the full value of dairy farming.

"The processing plant will be uniquely positioned and differentiated with the control on milk supply through captive milk production and well-placed to meet our customers' call for high quality dairy products with complete traceability and stringent food safety standards."

Upon completion, the proposed facility will have a capacity to process 600,000 liters of milk everyday, with plans to increase the capacity to one million liters a day in future.

The dairy processing plant will become operational in 2017. It will produce whole milk powder, skim milk powder and butter.

The products will be exported to key markets of Olam, including China, Russia, the Middle East, eastern Europe, Africa, Brazil, Paraguay and Venezuela.