China’s largest dairy company Yili Group has announced a NZ$70m (US$43.205m) investment in its New Zealand subsidiary Westland Milk Products.

Based on the west coast of New Zealand and acquired by Yili in 2019, the dairy company stated that the investment will be used to construct a new lactoferrin plant at Westland’s Hokitika facility.

The cash injection will “more than treble” its production capacity of lactoferrin, according to Westland. Moreover, the new facility will be capable of producing spray-dried lactoferrin on top of the company’s freeze-dried range.

Production capacity at Hokitika currently stands at 20 metric tonnes per annum.

Lactoferrin is an iron-binding protein in milk that Westland says is experiencing growing international demand due to its reported health benefits.

“Westland is the only New Zealand commercial manufacturer of bovine colostrum powder and this move will place us in the top three leading global companies in the lactoferrin category, with a market share of approximately 10%,” its resident director Zhiqiang Li said.

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“We were one of the first to market this highly specialised protein ingredient and over the past 20 years have established a reputation as a manufacturer of a product of exceptional quality.”

Westland CEO Richard Wyeth added: “We cannot improve on the incredible quality of the natural product our farmers produce day after day but we can ensure that we extract maximum value for that product, and our lactoferrin strategy is a critical part of that.

“Our bioactive ingredients innovation pipeline is well advanced, and we’re excited to be a step closer to bringing these concepts to commercialisation.”

The new plant’s construction is expected to take 16 months to build, with the first half of 2024 the expeted completion date.

Yili generated revenue of CNY110.6bn ($15.5bn) in its 2021 fiscal year and net profit of CNY8.7bn. In the first half of 2022, revenue rose at a year-on-year rate of 12.3% to CNY63.4bn, while net profit was up 15.2% at CNY6.1bn.

Westland recorded record-high annual revenue of NZ$1.04bn for 2022, showing a 27% year-on-year surge. This included an annual profit of NZ$39m, a NZ$120m turnaround over 2021.

In 2021, Yili invested NZ$40m into its subsidiary through an initiative named Project Goldrush, a move that doubled butter production at Hokitika. Its butter brand Westgold landed in the stores of grocery giant Walmart as a result of the investment.