Synlait Milk has acquired New Zealand Dairy Company (NZDC) for NZ$33.2m ($23.5m).

Based in Auckland, NZDC is currently constructing a new blending and canning facility at a site in Mangere, which will also be owned by Synlait.

The new facility will be infant formula capable and will enable Synlait to improve its blending and canning capacity. The acquisition will also enable Synlait to secure a sachet packaging line suitable for infant formula and milk powders.

Synlait intends to invest a total of NZ$56.6m ($40m) once the plant is commissioned, which is expected by October this year.

Synlait's managing director and chief executive officer John Penno said: “This purchase will allow us to meet current demand and provide some room to grow with our customers’ needs.

"The production line will be very similar to the blending and canning plant already in operation at Synlait’s Dunsandel site."

“Having a second blending and packaging site will also begin to mitigate some risk we have faced as a single site manufacturing company.”

The deal also includes an associated company, which owns the land and buildings in which NZDC operates.

Synlait will seek registration from New Zealand Ministry for Primary Industries and Certification and Accreditation Administration (CNCA) of the People's Republic of China, for the new plant.

Penno added: “The production line will be very similar to the blending and canning plant already in operation at Synlait’s Dunsandel site, with the same scale, high standards, equipment and build specifications.”