The Waikato Innovation Park has received a $3 million equity injection from Callaghan Innovation. It will use the funds to kick off a $5.0 million expansion of its FoodWaikato spray drying facility this month.
At full capacity, the new manufacturing capability is expected to inject an additional $38.5 million per year in export revenues back into the New Zealand economy from the sale of new, value-added consumer products.
“With this expansion, FoodWaikato will provide a greater level of development and innovation capability to dairy companies – that’s cow, goat and sheep – as well as fruit and vegetables producers.
“We’re moving from helping our customers manufacture ingredients that sell for around US$4,700 per tonne to US$20,000 per tonne. At full capacity, we will produce around 2500 tonnes of new, value-added products,” explained Waikato Innovation Park CEO, Stuart Gordon.
Science and Innovation Minister Steven Joyce said the investment aligns with Callaghan Innovation’s goal of accelerating commercialisation of innovation by firms in New Zealand. “The expansion of FoodWaikato provides more open access facilities that support smart ideas coming out of the food and beverage sector.
“With an estimated $38.25 million per year of additional export revenues expected to flow back into the New Zealand economy due to this one initiative, the FoodWaikato plant expansion will help more companies take their innovations to new export markets and help the Government reach its goal of doubling the value of exports by 2025,” Joyce outlined.
Stuart Gordon said expanding the facility is all about helping more companies take their innovations to new export markets.
“There’s no other open access spray drying facility in Australasia where companies can manufacture smaller runs of their first commercial batch of a new product. The only option for them is to build their own plant, which is cost-prohibitive for most companies – especially new market entrants. FoodWaikato offers a unique solution to eliminate this major innovation barrier,” he said.
Capital works kicks off this month and the spray dryer will be commissioned and fully operational in March 2015.
Once completed, it is expected employment at the plant will grow from 8 to 20 staff.
Hamilton Mayor Julie Hardaker said, ”Hamilton is renown for being an innovative city and an export powerhouse within New Zealand. Having this unique facility in our city is a perfect fit commercially. Being able to contribute significantly to economic growth is something our city can be proud of, as there is local benefit through both employment and assisting local food innovators to tap into new markets.
“While no rate payer money has gone into this endeavour, as owners of the Waikato Innovation Park Hamilton City Council has assisted in providing one pathway to help the Government achieve its added-value export strategy,” she said.
FoodWaikato’s expansion will involve installing blending, separating and injecting equipment within the footprint of the existing plant. This new equipment will allow specialty ingredients such as vitamins, minerals and oils to be wet blended with milk or fruit juice – prior to being spray dried in the facility.
“The current facility doesn’t support the on-site mixing required to manufacture formulated powders, and it hasn’t had the capacity to have milk solid standardisation. This has limited our potential client base and our ability to support the fast growing nutritional and non-dairy markets,” said Mr Gordon.
Mr Gordon said the FoodWaikato team will measure its success by the number of customers who expand their export sales and outgrow what the facility offers.
“If we’re successful, we will see our customers using the spray dryer to scale up to commercial production, take new products to market and become successful enough to build their own commercial factories. Our role is to facilitate as many companies as we can through this process,” he said.
FoodWaikato already has interest in the expanded spray dryer from companies in New Zealand and Australia. The FoodWaikato plant was opened in May 2012 at a total cost of $12.80 million. It is one of four facilities throughout New Zealand that make up the Food Innovation Network.
Over the past two years, it has processed milk powder for the Dairy Goat Co-operative. It has also spray dried avocado waste into high-value, pure powder ingredients for Avocado Oil New Zealand and assisted researchers to develop commercial quantities of food products for market testing.