Dunsandel-based Synlait, 39% owned by China's Bright Dairy, is on a major expansionary drive with recent investment of more than $400million in enhanced production across its $260million infant-capable facility in Pokeno, a $134 million liquid dairy packaging facility at Dunsandel and $19million expansion to its lactoferrin facility.
The addition of Dairyworks will add 240 staff to push Synlait's total headcount to about 1200, Synlait said.
The $112million acquisition, which is still subject to overseas investment office approval, also follows Synlait's recent purchase of cheese manufacturer Talbot Forest.
Synlait said it would produce about 5000 tonnes of cheese this season, including parmesan, cheddar, gouda and mozzarella for both retail and foodservice customers in New Zealand and internationally.
Both Talbot Forest and Dairyworks have their roots in South Canterbury.
Dairyworks was established in Temuka in 2001 by the Cross family, buying product from Fonterra and Westland Milk for its Alpine and Rolling Meadow brands, which it sold to supermarkets.
Production was relocated to Christchurch in 2009 and in 2016 the company bought ice cream brand Deep South, also relocating its production from Invercargill to Christchurch.
According to the Synlait announcement, today Dairyworks supplies New Zealand with almost half its cheese, a quarter of the country's butter as well as milk powder and ice cream.
Synlait CEO Leon Clement said the acquisition was an exciting opportunity for Synlait.
"This business is a great strategic fit for us.
"It will fit well with Synlait and provides us with an opportunity to keep optimising our value chain while giving access into Australia and the Pacific Islands where Dairyworks' presence is growing."
He said opportunities existed across both businesses to streamline supply chains in key areas of warehousing, transport and inventory holdings.
Synlait said Dairyworks would operate as a stand-alone business, with CEO Tim Carter, reporting to Mr Clement.
