New Zealand’s Dairy Expert: I Have a Date With China

BEIJING, July 31, 2014 /PRNewswire/ — Inner Mongolia Yili Industrial Group Co., Ltd (Yili for short) has seen its New Zealand-based dairy operation highlighted in articles appearing in several international publications as well as in news stories in New Zealand’s local media. The media organisations unanimously concluded that China’s dairy producers are driving the structural change occurring across the industry at a global level. The profile of a non-Chinese dairy expert having a key role in a Chinese-owned operation has drawn the attention of numerous media outlets. The dairy expert is a New Zealander named Shane Lodge who has been responsible for the building of the plant and, once production starts, for the plant’s product quality control. By taking on this role, Shane Lodge is experiencing first-hand the structural change gripping the industry. This article tells the story of how this New Zealander came to become the “foreign” dairy expert in a Chinese enterprise.  

Dairy expert Shane Lodge in Yili’s New Zealand plant.
Dairy expert Shane Lodge in Yili’s New Zealand plant.

“These guys are not in it just for the money, these are serious dairymen”

While poring over a map of China following the lunch, Shane Lodge could not help exclaiming over and over how evident the structural change across the industry has become since the time he first had contact with the far away China-based Yili.

Yili had been searching for the best resource worldwide to better serve the consumers in China, one of the world biggest consumers of milk. Then Yili met a dairy expert in New Zealand. The expert, Shane Lodge, explained, “It was on behalf of New Zealand that I had that first meeting with Yili.” 

Shane Lodge makes a mark in China.
Shane Lodge makes a mark in China.

The delegation of dairy executives that Yili sent over thought highly of Lodge due to his thorough knowledge of New Zealand’s dairy policies, pastures, milk sources and production methods.  After the meetings, members of the delegation researched Lodge’s background and found out that he had majored in dairy science while in college, solved many difficult technical problems during his years in the scientific research department of New Zealand’s Ministry of Agriculture, formulated many of the industry policies during a multi-year stint at the Ministry for Primary Industries, and perfected his quality control skills while at Fonterra Co-operative Group Ltd and later at New Zealand Dairy. Yili was amazed at this dairy insider’s professional background and, following the meeting, kept close tabs on him.

Lodge likewise thought highly of these people coming from a part of the world that at the time seemed so foreign to him. Each member of the delegation had asked pointed and well thought out questions: they asked about milk sources, plant construction and technical details and Lodge realized that this was not simply a financial play, these were serious dairy industry executives like himself, and they knew their stuff.

Several years later when Yili purchased a plant in New Zealand, the Chinese dairy producer found itself badly in need of local senior managers. The executives who had been part of the delegation remembered Lodge. Lodge, who had already done due diligence on Yili following the earlier meeting, accepted the offer wholeheartedly. He felt that Yili had already earned its stripes as an international player. To build a new plant for Yili, although he expected it to be challenging, was a challenge he looked forward to. He felt excited about the prospect.

“Seeking the perfect output”

New Zealand is one of the best milk sources worldwide, and thousands of dairy professionals worldwide originate from there.  But individuals with the versatility of knowledge and skillsets that Shane Lodge possesses are rare.  Building a plant, getting business approvals, setting up workshop layouts and managing equipment, even the quality control that will be needed once the plant is up and running, are a professionally highly challenging and demanding set of requirements that are difficult to find in one individual. Yili was in need of such high-grade talent to lead the construction of its plant in New Zealand.

For any other individual, it may be a huge and formidable task to build Yili’s plant in New Zealand from zero to a dynamic working plant with complete production capabilities within two years, but to Lodge it is something he could envision accomplishing with his substantial experience and ability.

Lodge’s work performance has proved that he is head and shoulders above the ordinary dairy expert: In his earlier projects, Lodge showed himself to be highly efficient and finished each of them on time with nary a request for an extension; even the most specialized builder praised Lodge’s professionalism when it came to his comments concerning the construction of the building and the engineering design.  The source of the plant’s production capacity, the milk provider, are Lodge’s “mother lode”, for he is intimately familiar with and knowledgeable about New Zealand’s high quality pastures and can use this knowledge to perfect the quality of production. As a result, even before construction was completed, Yili’s New Zealand plant had already lined up a stable supply of the country’s best milk.  

Lodge said that to succeed in one’s work requires not only professional capabilities, but also honesty of character that instills trust. These two qualities served to help Lodge win the supply contract from the largest local dairy farm. At the time local farmers were not at all familiar with Yili and no one would sign a supply contract with them. Lodge knew he had to secure a supply from the largest local farm and paid a visit to the home of the owner Aad van Leeuwen to first develop a relationship, before broaching the topic of the supply contract. Nevertheless, Leeuwen was cautious and asked several pointed questions, such as how he envisioned the cooperation working, Yili’s marketing channels, the status of the Chinese dairy market, among others. Lodge’s frank and professional responses put Leeuwen at ease and the farmer agreed to be a supplier. “Being straightforward and professional is always most important when working with farmers,” Lodge said.

It seems like just yesterday when the project was started. Now Yili’s New Zealand plant is ready for production. Lodge feels the plant is his best work to date, and the fact that he built this world-class plant from scratch totally on his own fills him with emotion when he thinks about it.

“I love working with my new Chinese colleagues and look forward to meeting more of them”

Lodge admits that he felt a lot of trepidation when he met with the milk consumers in China for the first time. He had to learn about their preferences in terms of flavor and type of milk as well as their insistence on the highest quality. As a result of those meetings, Lodge shoulders another important responsibility at the New Zealand plant: making sure that anything that comes out of the plant meets those high standards. He had to learn the ropes fast in order to deal with any production and quality control issues that could arise as soon as the go ahead is given to start production.

Like everyone in the field, Lodge was stunned by the speed at which a China-based dairy industry developed. Each step taken by the China-based dairy giants to expand beyond their country’s borders was a sensation. And now the scientific and technological level of China’s dairy sector is leading the way worldwide. After joining China’s biggest dairy producer, Lodge is taking advantage of the opportunity to learn what he can from the producer’s development strategy. The first conference call with Yili’s headquarters in China had been a much anticipated moment for Lodge who always lists down his many questions beforehand. As part of his daily routine, Lodge discusses not only technical but also theoretical problems with his Chinese colleagues, and the daily discourse serves to widen his vision. What has been a true source of pleasure for Lodge has been the sharing of ideas about the advanced techniques that have been coming out of China recently. The entire experience has made Lodge feel that the best resources are right there in front of him and has added to the confidence he feels about his quality control role.

Lodge is actively searching for ways to combine Chinese and New Zealand cultures during his leisure time. He enjoys the opportunity to learn some Chinese during his workday at the plant and studies calligraphy and the multiple meanings of Chinese characters in his spare time. In particular, Lodge loves studying Chinese characters with his favorite being “niu qi”, a series of two characters that roughly mean “bullish” in English. When Yili successfully ascended into the ranks of the world’s ten leading dairy outfits recently, Lodge gave the thumbs up and said “niu qi” in Chinese. Lodge then added, “I am showing off what I have just learned.”

Lodge said that he is surprised at the amount of attention he is getting not just from China but from industry watchers all over the world for his the participation in the construction of Yili’s New Zealand plant. Joining what is now a transnational dairy firm allows Lodge to witness first hand China’s position of power in the global dairy sector. Next step: he will help his Chinese bosses to better serve Chinese consumers by transforming the best resources into the best products.

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