MercoPress. South Atlantic News Agency

Singapore Olam will invest 80m in dairy processing facility in Uruguay

The plant is expected to begin production in 2017 with a potential of a million liters per day

Singapore based Olam International's wholly-owned subsidiary New Zealand Farming Systems Uruguay will be investing 80 million dollars to establish a new dairy processing facility in Uruguay.

The project will enable Olam to fully integrate its dairy supply chain and make effective the full potential of NZFSU's dairy farming operation by leveraging its global trading and distribution network.

The green-field dairy processing facility will initially have a capacity to process 600,000 liters of milk per day, going up to one million liters - the level of milk production that NZFSU dairy farms are expected to reach at steady state.

“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” said Olam's managing director and global head for dairy, coffee and commodity financial Services Vivek Verma.

Of the total investment, around 5m dollars will be used to buy 94% stake in Brazil's BG Industria Láctea, which has a plant in San José, Uruguay (100 kilometers from the capital Montevideo) in order to acquire land, licenses and permits required for the construction of the plant.

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, according to a release from the company.