Westland Milk Products is investing $40 million in a bid to double the capacity of its butter manufacturing facility in Hokitika.
The move is part of the company's strategy to pivot away from being a supplier of mostly bulk commodities and produce more consumer products, Westland resident director Shiqing Jian said on Wednesday.
Jian said the plan had been five years in the making and had the backing of Yili - the Chinese company that bought Westland for $588 million in 2019.
"The investment highlights the important role Westland plays in Yili’s ongoing plans to supply international industrial and consumer markets," he said.
"In future, demand for butter production and processing of Yili and Yili subsidiary brands will be considerable, and the upgraded Westland plant will play an important role."
Jian said the investment comes as annual global butter and spread sales are predicted to grow from the current US$44 trillion (NZ$63 trillion) to US$59 trillion (NZ$84.5 trillion) by 2025.
The upgrade will increase Westland's consumer butter production to a total of 42,000 tonnes a year.
In order to offer greater quality control and production efficiencies two German-built churns will replace the existing single churn, which was built in 1978. New packaging lines will also be installed to allow the company to package different formats, and the palletising system will also get an overhaul.
Richard Hickson, Westland chief operating officer, said site works, construction and installation was expected to begin shortly before the factory's annual winter shutdown in May and run for three months.
