Growers are fearful they may face huge costs to get the product north and are wondering what the product’s carbon footprint will be.
Players in the oat milk factory, which was planned for Southland but is now heading to Canterbury, met on Monday to discuss options.
New Zealand Functional Foods (NZFF), working in conjunction with Southland business agency Great South, had planned to build an oat milk factory in Southland, generating 70 new jobs after the construction phase had been completed.
But last month, NZFF chief executive Paul Harvey announced the plant would now be constructed closer to more suitable infrastructure in Canterbury.
"We’re not expecting this change to have any impact on the financial model for our Southland growers ... Our larger vision will enable the scale and efficiencies to ensure value is enhanced for all," he said.
NZFF proposed buying Southland oats and transporting them north to the new plant by road.
Federated Farmers Southland arable chairwoman Sonia Dillon said she acknowledged transporting the oats was an issue, but not an insurmountable one. Transporting products to Canterbury was expensive and always a challenge for growers.
"They [NZFF] basically said they were looking to overcome these challenges, so that it was pretty much a non-issue.
"They totally hear what we see as a challenge, and they believe they can find a solution. So with that in mind, hopefully it’s really good news for growers.
"But there’s nothing offered or nailed down yet," Ms Dillon said.
Mr Harvey said the company now had a larger vision and transporting the oats to Canterbury rather than the finished product meant a more efficient business model for NZFF.
Advance Agriculture managing director Howard Clarke said he believed Southland had great export options via its rail and seaport available for the NZFF finished product.
He was incredibly disappointed the factory was being shifted to Canterbury.
Growers had only been given an expression of interest and had yet to be presented with supply terms and conditions.
"Nothing was guaranteed yet.
Nor had there been any "concrete offers" yet.
Transporting grain to Canterbury was always an expensive exercise.
Mr Clarke said he would welcome an inquiry into how 10 years of work from Great South employees would end with a plant being built in Canterbury.
The high quality of the oats grown in Southland was its main market advantage over Canterbury growers.
"Historically because of its climate, Southland is one of the best places in the world to grow high-quality oats."
But he believed the transport costs were a genuine barrier.
The raw product’s increased carbon footprint caused by the additional transport definitely raised questions for him.
- By Toni McDonald
