Synlait, the Canterbury corporate dairy farmer, has been hunting for capital since it began making milk powder two years ago. It’s already an unmistakeable site on State Highway One about 30 mins south of Christchurch. The plant handles 300 million litres of milk from its own farms and supplies from rival Fonterra, as required under the dairy industry deregulation that spawned Synlait.
Synlait has now secured an $82m injection from China’s Bright Dairy, taking a majority stake in the company, already 22 percent owed by Japanese coporate Mitsui. Subject to regulatory and shareholder approval, Bright Dairy’s capital will see Synlait’s milk powder output doubled by 2011/12 .
This lines up neatly with the Government’s announced agenda to see new water allocations flowing in Canterbury next year, long before any tough new environmental controls can be put in place. You can’t help but believe the Synlait injection wasn’t in Government’s mind – Ruth Richardson is on the Synlait board – with its axing of Environment Canterbury’s elected councillors who were among those concerned at the deteriorating water quality, most particularly in the area around where Synlait’s milk plant is centred.
Dunsandel township, just up the road from the existing plant, has had e-coli in its water supply for the past year. Synlait wants to double production and later double it again. Little wonder it has invested in the Central Plains Water project, which, despite occasional attempts to mask its purpose, is designed to create more water for dairying. Fonterra is also intent on using the CPW scheme to create milk for a brand new $100m plant it is planning at Darfield, to the norwest of Dunsandel.
So a new wall of milk is coming fast, with little prospect of tough new environmental rules in the same timeframe. Little wonder, water is now identified as the number one issue in Canterbury. Nick Smith is in Christchurch tomorrow for a major announcement on water issues, so perhaps he comes with soothing words. Trouble is, milk comes ahead of water as far as his Cabinet colleagues are concerned.
Bleeping disgraceful
!
What’s disgraceful Spud, stop hiding behind your emoticons.
At the same time, i’m not sure what you’re getting at here Brendon? Some sort of conspiracy perhaps? Synlait is a very successful company with a different market to Fonterra, a modern plant, employs good talented people and ordinary (a word many love to use) NZers. As a diary company, of course it’s going to invest in the water plains project, whether or not an MP is on the board. Or are you just bashing a successful brand? Or perhaps, like the Crafer farms, it’s a foreign ownership issue?
The Central Plains Water project is a terrible idea. As someone who loves the outdoors, recreational hunter and Chch resident, the sacking of the ECAN board was shocking and the plan very disturbing to mine and other activities and well being. But Brendon, please elaborate on your post because i’m struggling with it.
I’m guessing you’re not the climate gate s imon!
I’ll 
comment 
however! 
I 
like! 
!
In answer to your question, well there’s this little thing called water, S imon, and if it’s all pumped away by excessive dairying there will be nothing clean left! Comprende?
And what happened to NZ companies taking a majority stake in a Chinese business?
“China is signalling to foreign investors in its brewing industry that future investments would be better received if made with a local partner.
The Director-General (minister level) of China’s State Administration of Light Industry, Chen Shineng, said joint ventures would be preferred to wholly foreign brewery investments.”
gwwnz…the Chinese have long figured out the games of the Western capitalists…a consequence of the school of hard knocks (e.g. losing two opium wars and Hong Kong to Great Britain, being forced to pay the British billions in gold and silver as war reparations and allowing the Brits to pump opium into a newly-opened-by-military-force Chinese free market).
No Spud, I don’t Comprende. The project is not about pumping it all away, it’s about building dams and diverting the flow. You’ll have to do better. The water isn’t going to disappear you know. And what do you mean about excessive dairying? Is it the same as excessive emoticons? Wasteful, tiresome and only beneficial for the few?
Canterbury is dry, not a good place for dairy farms. Emoticons don’t suck up natural resources and they’re like little balls of sunshine
Building damns carrys its own environmental risks and they will still be using EXTRA water for their farms. Also, just where are they planning on flooding?
p.s.
:-D
Simon
Do you accept that many parts of Canterbury suffering from lack of water, that is, are dry? Do you accept dairying requires lush pastures? Surely finding ways to divert water for irrigation, of the volume required to moisten drought suceptible paddocks is a waste of a natural resource?
I was staggered to here one person stating that mot of the water in Canterbury rivers (95%) just runs into the sea. As though that in itself points to waste. As an outdoor person you probably understand the part that 95% i playing in ecosystems, etc etc
In my opinion the quality of drinking water in Christchurch has deteriorated in the last ten years. I dont know why.
Also, last week we had some more farmers and a business fined for pouring effluent and waste into our waterways… it on;ly has to be a small number to do great damage.
Where else would you put them? the Chatham Islands? Canterbury has a lot of flat land that would otherwise go to waste. You forget that NZ relies on primary industry to fill its coffers. As I said above, i’m not in favour of the scheme but you’ll be surprised about the products milk powder is actually used in. It’s not just about milk on your cornflakes.
Simon, do you know how much land there is in NZ? It is a nonsense to put dairying into drought areas. I am very aware that milk products are in all kinds of things, including salt and vinegar chips. We are NOT talking about Canterbury or NOTHING. This is partly about farmers who cant adapt, not far anyway, instead of sheep or cattle, they’ll do cows. We (Government RC’s) need to get alongside this land and its owners and together come up with supported viable options, instead of being fixated on milk.
“Waste”?? perhaps if we thought more innovatively about what w might use that land for, that is not going to involve a fight against that very environment.
Relying on it is part of the problem, we are too scared and seemingly too full of self doubt to consider anything other than what we’ve always done. This is not tomorrow thinking, and we will pay the price. In Canterbury water will be the first casualty, along with the ecosystem it relies upon and relies upon it. There MUST be balance
Of course i’m aware Tracey, I live here. But if your 95% figure is correct, what % of flow would be then used by the dairy industry? Needless to say, I won’t be voting for Bob Parker. I’ve already stated my opposition to the plan, signed petitions etc…
The main post above, to me, implies some form of conspiracy involving Synlait, Fonterra and Nat to pander the the needs of Canterbury farmers. That is why i’ve asked Brendon to elaborate.
IMO, Chch water is the best i’ve ever drunk, far better than that chlorinated crap you get in Auckland.
Agreed to everything you’ve written today Tracey
Couldn’t agree more, the Auckland water is awful and Christchurch water is heavenly but it doesnt taste as good as ten years ago. I’ve lived in both cities and travel to CHCH several times a year.
To describe 95% of a water flow into the sea as a waste shows a serious lack of understanding of ecosystems, of which humans are a part. If humans cant see what it’s doing it cant be doing anything
I’m also waiting to here Grant’s response to your query.
Is this poster from another thread not you?
“Simon says:
July 20, 2010 at 3:06 pm
‘And to answer the question before its asked. This is the time for investment in a clean green, high tech economy that builds on our traditional strengths, and opens up new opportunities.’
An excellent Idea. What we need also need to do is be able to market those ideas and products and sell those skills overseas, which at the moment, apart from lamb and the ABs, we’re not particularly good at.”
Whatever that land gets used for Tracey is going to need water. Whether you put cows or crops, it still requires irrigation. Perhaps Spud, as you’ve put in previous posts, we would build more houses.
S imon – If they want to dairy then they should be made to live somewhere else, let them grow wool instead.
Pick a rainy part of the country.
And build some houses for the new farm workers 
Eco insulated houses. 
Grow wool? On trees perhaps spud?
Tried selling any wool lately Spud? Cost of shearing just about covers sale of wool. Wool is a great resource going to waste because nobody wants it at a reasonable price. And a farmer is entitled to his profit, isn’t he? Or is that a forbidden word here.
Is that sort of like cannabis?
I don’t know I’ve never smoked it
But it’s frequently used in health supplements to boost immunity. Correct me if I’m wrong but I think it likes dry climates 
Simon, crops gown on drought susceptible land which are more suited tot hat require FAR LESS water than Dairy.
The thing that strikes me about comments on political sites is the paucity of knowledge about the most important part of our economy. The ignorance of just how difficult it is to grow anything, let alone break even with it, even when all the elements are in your favour is dangerous. Without agriculture NZ would be in dire straights, not only in exports but just as importantly in food security as public order breaks down incredibly quickly when serious shortages occur. Inane urban rubbish such as “we can grow our own in the backyard” dismisses the volumes and quality needed just to feed NZers. The problem with Canterbury is that one part of the mix wants to monopolise the nessecary resource because unfortuneatly thirsty dairy needs to be big to be economic. Small scale anything in agriculture is a barely subsistence enterprise because the very critics of agriculture refuse to pay a fair price for the produce. At the moment dairy is on the cows back but only because large economies need to feed workers to keep their factories going, this could change at any time and almost did a few years ago with returns below costs ( thats why the Crafars are in the pooh ). “Alternative crops” are just a faster way to go broke and only make money when a poor deluded dreamer writes a book about how they wasted so much money. We have to protect water and soil resoursces so that they are used in the most efficient manner, but the unfortunate fact is that land will always go to the use that makes the most money. The only other alternative is the old Russia central planning schemes dreamed up by city based idealists, ignorant of agricultural realities, which left the populace starving.
GE crops Tracey? A whole new can of worms.
Maybe ChCh can have milk form it’s facets instead of water…
Fair call Simon, I wondered if that would come up. I’m no monsanto fan, quite the oposite but GE modifying of crops/plants has gone on for a long time… those neat new rose species arent sprung from nature’s bounty.
I think it behooves us to explore more broadly… and I dont mean GE
Adrian – I do understand the cost of cropping in this country. I am very aware that mining per hectare produces more money, than dairy does, or sheep or wheat. I’m also aware of the cost of insufficient water on communities, ecosystems and the economy.
“We have to protect water and soil resoursces so that they are used in the most efficient manner, but the unfortunate fact is that land will always go to the use that makes the most money. ”
Exactly, change from old to new thinking is required. Because epople have always gone for the profitable option, doesnt mean that we have to apply that as our only yardstick OR that we cannot use our ingenuity to think of new ways to achieve profit and balance. Too many old heads thinking only of what they already know.
Given Christchurch’s increasing electronics and technology niche, perhaps this is more where the future lies for them? It’s interesting that the MacKenzie Basin debate has seen opponents use the Canterbury plains as a pointer for where the basin is heading… hardly a glowing endorsement of the plains for agricultural, animal purposes.
Perhaps Christchurch could be our Silicon valley, green technology base etc etc
@Jeremy LOL
@Tracey – yeah but they just make it so that people can spray more and more poison (some of which is banned in other countries) onto our food. Makes boys effeminate and brings on early puberty in girls. Not to mention all that bleepin cancer!
Maybe they could create solar power plants there?
Solar power plants can be problematic. I just cant believe there aren’t people all over the place with ideas beyond dairy and crops.
@Adrian
I think your comments show you don’t understand what has been occurring in dairying. The price of dairy farms got to the point where they could only produce enough milk solids to pay the interest on debt. That is what got the Crafar’s, with the drop in milk prices.
Many farms weren’t profitable in their own right and were only profitable due to speculative activity creating capital gain.
Modern dairy farms are factories inputs of diesel, electricity, nitrogen lime, labour, herbicides/pesticides etc are all all used to manufacturer milk solids…the cow is just the factory. The waste is the cow factory produces is toxic to our waterways The land is only a space resource for stocking cows and growing grass.
There are some very responsible dairy farmers but there are just as many if not more dirty dairy farmers. Take a drive they are easy to spot, especially here in the Waikato.
I’ve got two very good friends who are dairy farmers and I rate them as the hardest working people I know, I won’t see either for a couple of months as calving starts.
http://straightfurrow.farmonline.co.nz/news/nationalrural/agribusiness-and-general/general/fines-over-effluent-offences/1887195.aspx
““The judge had acknowledged the insidious and cumulative nature of the discharges and it is for those reasons that we place so much emphasis on preventing pollution of this nature,” ”
” Two Southland dairy farmers and a company yesterday were given hefty fines for unlawfully discharging dairy effluent to land.
Union Station Dairies and Jeavon Zeestraten both appeared before Judge Jane Borthwick in the Invercargill District Court on the same charge of discharging dairy shed effluent to land in circumstances where it could have entered water at the Tussock Creek property near Winton on January 9.
Environment Southland lawyer Barry Slowley said a council contractor found a pond of effluent on the farm during a routine inspection. The effluent was contained but only because a blocked drain stopped it from entering Tussock Creek, he said.
The summary of facts says since the property was bought in 2004 there has been a history of non-compliance including three prosecutions. ”
http://www.gatorbuddy.co.nz/farmer%20not%20deterred%20by%20record%20effluent%20fines.pdf
Simon, re “Canterbury has a lot of flat land that would otherwise go to waste.” I personally favour more greening of our Canterbury Plains but we must get the environmental controls in place – when a moratorium is announced on the hurunui, in part because water quality is so poor in lower reaches it is unsafe to swim in (let alone drink), we have a serious issue. Agree Richard, there are some responsible dairy farmers, though the Waikato does drain into its river which discharges nearly 100 truckloads, equivalent, of nitrates every day at the mouth. Dealing with nitrate is the major problem, effluent can be handled.
@Brendan Burns – Our low lying farms suffer from direct cow to stream discharge, not just effluent from the shed. The clean up of the Raglan Harbour catchment through planting and fencing streams is testament to that.
Richard Shaw.. I know exactly what is happening in dairying, it’s the same as any other agricultural product that capital flows into when it starts to show reasonable profits, it forces up the cost of the only real constraint to increased production.. land, until the cost of that land stretches profitability. The same thing has happened to grapes in Marlborough, which is going through a correction, but even with short term depressed prices, grapes are more profitable than dairy, otherwise we’d be kneedeep in cowshit. Which goes to prove my point about land use migrating to its most economical use. Dreamers going on about moving to a hi-tech manufacturing future are completly wrong, in the short time that we have been exporting agricultural produce, hundreds of cities worldwide have risen and collapsed on the promise “new hi-tech future” products. Cities like Detroit, Sheffield, Manchester, Pittsburgh and countless others, and nothing is surer than that Helsinki will follow them.
Adrian, given your statements above, why do you think Canterbury isnt looking to grapes rather than cows?
@Adrian would the land price have gone up to the extent it did with out cheap credit? No – it couldn’t have. It creates a vicious out put focused mentality where the ends justifies the means.
In this case intensification, more cattle on same land,more feed input, more fert. This equals more effluent more nitrate run off than ever before.
Who really wins out of this debt growth cycle? Ordinary farmers?(no) the environement (no) our economy (yes) banks (greatly).
We hit a point of diminishing return where every extra dollar spent on inputs does not create exponential profit but the evidence suggests creates exponential environment degradation.
An analysis that considers environmental degradation and loss of other economic opportunities may show dairy farming on the Canterbury plains to be unsustainable at a certain input point.
Perhaps Organic dairying on the Canterbury plains could be appropriate, fewer inputs, less fert, lower stock numbers,less pollution. ah but it won’t cover that pesky cost of irrigation, so perhaps the Canterbury plains is a just a stupid place for cows.
Adrian said:
“Dreamers”? That implies unrealistic or fanciful follies when in fact many countries around the world have shown in actuality that high tech industry and high value added services industries are an important way to lift national wealth. Singapore, South Korea, Japan, China, Germany, Finland all demonstrate this. And just watch Australia leverage off their commodities windfall into the knowledge industries (they have increased their education spending by 86% in just three years).
The cities you mention – cities cannot implement many of the policies and strategies required to move to a high tech manufacturing basis, a lot of that work has to be done at a national/Governmental level.
@Loota good point
The other third of our export dollars is tourism that generally doesn’t require farming anything.
I wonder what will happen when AJ Hacket can’t dunk people into a river because it is either full of cow sh1t or not there.
@Adrian, it really depends if an industry is open to change, if Nokia realises that in 10 years it may not be making a single cell phone but bigger profits from e-readers for example then Helsinki should be fine…
This openness to change determines the long term viability of “high tech” manufacturing, it and telecommunications are increasingly volatile industries, it’s why I completely disagree with Loota about the government’s need to involve itself in high tech development, good regs and special economic zones sure, but governments (especially in democracies) cannot respond effectively to the increasing pace of change to come, people respond to change better and the government trying to pick winners (like Singapore did with electronics or Korea with cars) is going to get increasingly difficult… Who would have thought Rupert Murdoch’s fortune is in trouble due to the upcoming collapse of publishing due to the internet for example..?
In NZ we are seeing the transistion beginning with Tindall investing in high tech growth industries almost exclusively and the South Sea Cable group forming, even Telecom is looking to foster more innovation with the opening of it’s new Victoria St premise…
Just need to demonstrate to the seasoned investors that software, electronics, cell technology, renewables, bio-diesel and in future nano-technology can be profitable in NZ… Tax breaks would help but not protectionism…
Dairying should always be a big part of our economy but not at any price, set environmental regulations and a new reality will evolve, in the early 1900’s the Great Lakes in the US were on fire and people said it was unacceptable and the regulations were changed – industry survived and a new norm was accepted, that is what is so disgusting in this case, the people have been stripped of their voice to say what is unacceptable to them and set their own environmental limits… By placing some restrictions now at current levels people will adapt, get more use out of each litre etc…
We probably need to be educating in the right areas and holding onto our best, including Profs.
Didn’t we have a world leading academic in Superconductors? An American Uni essentially brought his entire team and gave him an open cheque book to fit out his lab. The NZ governement of the day sat on their collective hands.
Not sure tax breaks will do it alone.
An American Uni, fat with money from providing the best education in the world and with donations from rich philanthropists could afford to employ this guy and his team and to fit out a lab and your answer for us is to get our government to pay for it…
How deep do you think our government’s pockets are..?
JMH all I want to know is whether or not the NZ Govt of the day gave his research team a serious hearing, and presented them with a serious proposal to consider.
JMH said:
1) Sounds like you do agree with *some* Govt involvement
2) It seems like you think the Govts of China, Singapore, Germany, South Korea, Japan etc. all have some kind of special lightning quick reflexes compared to other western democracies.
(By the way, there are some democracies in that list you know)
@Tracey – here’s my idea – a new theme park, The Lord of the Rings
Ride down Mount Doom on a log flume! 
I think that any plans for damns in the desert and new dairy farms should be canned as the environmental cost is too high to Canterbury.
I meant dams
China’s communist, Korea and Singapore are dynasties in all but name, Japan economy is stagnant and Germany is in the EU (might get kicked out if the government didn’t get involved to some extent)…
I just think the game has changed, the pace of change is getting scary, e-books will likely kill physical publishing in 10 years, magazines may be killed just as quick by e-pads, every thing is going online…
When fibre replaces copper in the first world the tech gap between the first world and the third world will explode, Moore’s law is progessing unabated with chip speed doubling every two years – computers will have more processing power than a human mind by 2050, Moore’s law also applies to fibre except we are doubling the amount of data we can “light” down every 9 months (the person who figures out how to utilise the 8,000 times faster speeds FTTH can provide will make Bill Gates look poor IMO), 90% of the scientists who ever lived are alive today…
With all that coming the government cannot pick winners apart from telecoms, bio-diesels and renewables… And we already have competitive (or developing) industries in each of those fields…
@ JHH
No it was the collective surrendering of knowledge that many pontificate on as the hope for the NZ economy.
but I vaguely remember him saying he wasn’t looking for that much money and would have stayed if $X had happened and $X was well within our means.