NZDC is based in Auckland, and is currently constructing a blending and canning operation at a site in Mangere. This site will now be owned by Synlait.
The facility will be infant formula capable, and will enable Synlait to substantially increase its blending and canning capacity.
The acquisition will also provide Synlait with a high specification sachet packaging line suitable for infant formula and milk powders.
Managing director and CEO of Synlait, Dr John Penno, said the takeover will allow the company to meet current demand, as well as provide some room to grow.
“Having a second blending and packaging site will also begin to mitigate some risk we have faced as a single site manufacturing company,” Penno said.
Looking for Chinese registration
The capital investment includes a gross payment of NZ$33.2m (US$23.5m) on acquisition, with Synlait expecting to spend a total of NZ$56.5m (US$39.9m) once the plant is commissioned.
An associated company, which owns the land and buildings in which NZDC operates, is also included in the deal.
Synlait will seek both MPI (Ministry for Primary Industries) and CNCA (Certification and Accreditation Administration of the People's Republic of China) registration for the new facility.
The existing Synlait Milk facility currently processes more than 550m liters of milk each year. It is capable of processing 3.2m liters of raw milk per day, from which up to 340 metric tonnes of milk powder can be produced.
Commissioning of the new facility is scheduled for October 2017.