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A group of dairy farmers hoping to produce butter and skim milk powder in Newfoundland has cleared a major hurdle and could start construction on their new production facility soon.
The Real Dairy Company of Newfoundland passed its environmental assessment late last month, and is now preparing the engineering work to determine exactly what the factory will look like “from the most complex to the simplest details,” says partner Brent Chaffey, a dairy farmer in Bay St. George South.
The $25 million project is spearheaded by 13 local dairy farmers and an Irish dairy company.
“We’ve secured all the capital requirements,” Chaffey told CBC Radio’s Newfoundland Morning on Thursday. “Barring any unforeseen expenses, we’re in good shape and we’re ready to go.”
The facility will be built in Deer Lake on four acres of land in the Veteran’s Memorial Industrial Park.
Chaffey said the plan was born from frustration about exporting milk from Newfoundland and Labrador to other provinces for secondary processing. The province lost two processing plants in 2013 and 2016, which resulted in most milk — about 16.5 million litres a year — being shipped elsewhere to turn into products like cheese, butter and ice cream.
The COVID-19 pandemic then highlighted vulnerabilities within the system. There were times when processing plants in mainland Canada reduced production or stopped all together, affecting supply and prices at home.
Process is long but business case is strong, says partner
It’s been years since the Real Dairy Company of Newfoundland hatched its plan, but Chaffey said the market has only grown stronger as they waited for the red tape to clear.
“We’re extremely disappointed in how long it took to get where we’re at, but the interesting thing is the business case itself strengthens every day,” he said. “The need for a facility such as this one in this province is reinforced almost monthly when we look at the reduction in production capacity outside this province.”
While the process has felt glacial at times, Chaffey credited financial support from the province for making it possible. The provincial government kicked in $5 million in 2020, while the federal government pitched in with a $5 million repayable loan through the Atlantic Canada Opportunities Agency and a further $8 million through Agriculture and Agri-Food Canada.
Chaffey said the engineering work should be finished within a few weeks and further work will be put to public tender. That process should last another four to six weeks, and the company hopes to have shovels in the ground at some point this summer.
Products will be sold locally, across Canada and to international markets.
Read more from CBC Newfoundland and Labrador
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