The run was for the company’s own proprietary KeyDairy brand, specifically, Whole Milk Powder and Skim Milk Powder SKUs.
The additional capacity from the second manufacturing facility will more than triple Keytone Dairy’s total name plate product manufacturing capacity in New Zealand on a one shift basis and will be implemented immediately given the increased level of demand from that earlier anticipated, given the current outbreak of COVID-19.
The company added it expects to scale up production to multiple shifts over the short to medium term.
The company said it can now manufacture significantly higher volumes of finished product from its New Zealand manufacturing facilities more efficiently across a broader range of the company’s proprietary product suite, and re-align the sales mix towards higher value proprietary products, with a view to substantially growing sales and meeting demand of the existing client base.
The new facility will also enable Keytone Dairy to better service the demands of clients and brands such as Walmart (China) and Woolworths New Zealand.
The second facility is infant formula capable, and incorporates automated equipment with technology that is a first of its kind in New Zealand. Keytone said this is expected to drive operational leverage and efficiencies within the business and further improve gross margins.
COVID-19 update
Keytone said it is experiencing a significant increase in inbound demand for its products and those manufactured for third party clients. The increase in demand is being seen across all operations of the business in Australia and New Zealand and is being driven from international and domestic markets.
The company’s proprietary KeyDairy formulated powdered dairy products have experienced an increase in demand approximately four times greater than that prior to the COVID-19 outbreak. The company is also fast tracking the roll-out of an online platform for the direct purchase of its milk powders.
Keytone is experiencing a strong uplift in the volume and frequency of private label orders from existing third-party clients for the manufacture of their shelf stable nutritional products and demand continues to grow both internationally and domestically.
It said an increase in queries from new clients is further broadening the client base and financial performance of the business.
The company said it does not foresee any material supply chain or packaging constraints at this point in time.
Keytone said it expects that following the containment of COVID-19, there will likely be a structural shift in the consumption patterns of consumers globally with an increased focus on health and wellbeing.
Keytone’s CEO, Danny Rotman, said, “The health and safety of our employees, customers and our community is first and foremost in these challenging and uncertain times. We have acted quickly and diligently and put in place additional measures for the safety of our people and customers as well as to ensure the continuity of our diversified operations.
“We are experiencing a significant increase in demand for nutritional products, across our product portfolio and in particular immunity related products. Given our flexible and diversified operational manufacturing base we are in a unique position to fulfil the growing number of customer orders.”