Westland Milk parent Yili Oceania posts a record $58 million New Zealand profit as the value over volume strategy delivers

Yili Oceania, the New Zealand arm of China’s largest dairy company, has reported its strongest year on record, with combined pre-tax profit across its five local operating companies climbing to $58.44 million in 2025, up from $13.95 million the year before. The 319 percent jump comes alongside a 14 percent lift in consolidated revenue, which reached $1.58 billion against $1.38 billion in 2024.

The result covers Westland Milk Products on the West Coast, Oceania Dairy at Glenavy in South Canterbury, EasiYo in Auckland, ingredients business Canary and infant formula manufacturer Pure Nutrition. Together they form the Oceania Business Division of Inner Mongolia based Yili Group, the dairy giant which entered New Zealand in 2013 with the construction of Oceania Dairy and expanded sharply in 2019 by acquiring the Hokitika cooperative Westland Milk for $588 million.

Executive director Zhiqiang Li said the result reflected a deliberate shift away from chasing scale for its own sake. The business was now pursuing what he described as solid, higher quality growth while maintaining fair, transparent and sustainable relationships with farmer suppliers. Yili’s leadership has spent the past 18 months pushing capacity into protein and fat ingredients, butter and lactoferrin, where global demand has run well ahead of supply and where margins are markedly fatter than commodity milk powder.

Alex Turnbull, who took over as chief executive of the five company group in February, said the business was now well placed to build further on the value over volume strategy and that production planning and talent management would be the immediate priorities. Turnbull spent more than three decades in senior dairy and food roles, including a stint as Fonterra’s managing director for Latin America, and most recently led the turnaround of Manuka Health, which returned to profitability under his watch before being acquired by Comvita’s Singaporean rival.

The financial turnaround at Yili’s New Zealand operations matters well beyond the company’s Shanghai listed parent. Westland’s farmgate milk price of $10.16 per kilogram of milk solids in the 2024-25 season was up 30 percent on the previous payout of $7.83, and at that level the West Coast cooperative is once again competitive with Fonterra rather than trailing it. For the roughly 280 family farms that supply the Hokitika factory, mostly along the western flank of the Southern Alps, that is the difference between a sustainable season and another year of pressure on cashflow.

Capital spending has lifted alongside earnings. A third butter production line at Hokitika came online during the year to expand output of the premium Westgold grass fed butter brand, which is sold into Australia, North America and parts of Asia. A second lactoferrin plant was also commissioned, which Yili says now ranks as one of the largest dedicated lactoferrin facilities anywhere in the world. Lactoferrin, an iron binding protein extracted from milk, sells into infant formula and high end nutrition markets at prices several orders of magnitude above those of whole milk powder.

Turnbull has publicly described Westland as the economic cornerstone of the West Coast, and the figures back that up. Westland is the region’s single largest private employer, and its tanker fleet runs from Karamea in the north to Haast in the south. When the cooperative was struggling between 2017 and 2019, the West Coast economy was visibly hurt, with Hokitika rents falling and supplying farms going on the market at heavy discounts. The reverse is now playing out, with Statistics New Zealand business demography figures over the past year showing a slow rebound in employment in the Westland district off the back of the dairy uplift.

The result also lands in the middle of a broader debate about the role of foreign capital in New Zealand’s primary sector. Yili Group is majority owned through its listing on the Shanghai Stock Exchange, with the Inner Mongolian provincial state holding a meaningful indirect stake. Critics have argued that profit generated from New Zealand grass and New Zealand cows is now flowing offshore, while supporters point out that under Fonterra and earlier under Westland’s cooperative ownership, the Hokitika business was loss making, undercapitalised and at one point on the verge of failing. The capital injection from Yili paid for the Hokitika butter expansion and the Glenavy infant formula plant, neither of which existed at meaningful scale a decade ago.

The 2025 numbers also come at an interesting moment for global dairy. Chinese demand for imported dairy has cooled from its peak under President Xi Jinping’s earlier dietary push, and Fonterra’s most recent guidance has pointed to softer Greater China sales. Yili’s New Zealand result suggests that the answer for exporters working out of New Zealand is less about pushing more tonnes through the system and more about climbing the value ladder, into ingredients and finished consumer products that command higher prices and cope better with currency swings. The 30 percent farmgate lift, against the backdrop of a relatively modest 14 percent revenue rise, is a sign that the price per kilogram is doing the heavy lifting rather than volume.

Whether Yili can sustain the trajectory will depend on how well it manages an inevitable tightening in farmgate milk prices later in the season and on whether the lactoferrin and infant formula categories continue to grow at their current rates. For now, the business is enjoying its strongest financial position since arriving in New Zealand thirteen years ago.

What do you make of Yili’s record New Zealand result? Has Chinese ownership been good or bad for the West Coast and for the dairy sector overall? Share your thoughts in the comments below.