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Amid Global Dairy Market Boom, Processors Turning to SPX for Innovation

More people than ever are drinking their milk, eating their yogurt and buttering their toast. At a recent trade show, Rabobank dairy analyst Tim Hunt put it this way: to meet the dairy demand by 2020, we'll need another New Zealand – currently one of the largest fresh dairy producers in the world.

While commodity dairy prices are currently low, global dairy consumption has been trending upward in recent years, thanks largely to China's relatively new taste for the white stuff. (read our recent analysis of why the Chinese are drinking more milk) This is all good news for companies inventing and producing the technologies used to transport and process milk, yogurt, and butter. A February report published by MarketsandMarkets projects that the dairy production equipment market will reach $10.4 billion globally by 2019, growing at a rate of 5.3 percent annually.

Claus Thorsen, who directs research and development for SPX Flow food and beverage, including customer-driven innovation, says the Charlotte, N.C.-based firm can thrive in such a bullish market because of the cutting-edge technologies its portfolio of companies offer dairy producers.

“Companies that will grow and survive in this market are the ones that will be able to differentiate themselves and innovate," he says. “What the customer is looking for is someone who can differentiate themselves and get them quicker to the market. What makes us strong is that we're proud of our history, but we don't dwell on it. We need to constantly evolve."

The market for drinking milk products alone will be a $218 billion industry by 2019 – up from $186 billion in 2014 – according to Euromonitor. China's market for infant formula (caused in part by a baby boom following the government's loosening of the one child policy) has sparked a demand for powdered milk in that country. India, with its 100 million children under 36 months old, may present the largest opportunity for future growth in infant formula consumption.

SPX is devoting a large portion of its research and development, Thorsen says, to technologies that will meet the current and future global demand for infant formula made with dry milk powder. Its proprietary spray drying system produces powders that are easy to disperse and dissolve and ensure consistent end-product quality, while also providing complete control over a plant's production run-time, yield, and operating costs. And SPX heat treatment removes bacteria from the milk before it is spray dried, a welcome technology for many producers in the wake of recent food safety scandals affecting infant formula.

“This gives you a higher quality powder, which means our customers can attain a higher price for their powder," Thorsen says.

Despite the potential in dry milk, SPX's offerings on the fresh milk side, such as its direct and indirect heat technologies and thermal transport, continue to add value in markets where there is growth. Arla Foods recently contracted SPX to install a new fresh milk processing system at its Aylesbury, United Kingdom, plant. Applying SPX's innovative technologies, the plant is planned to have the capacity to produce up to one billion liters of fresh milk annually.

“The Arla plant in Aylesbury features some of our most sophisticated, highly automated, and energy efficient dairy processing systems, which have helped make it not only one of the world's largest dairy facilities, but quite possibly the world's most sustainable dairy plant," Marc Michael, president of SPX Flow Food and Beverage, said in February. “The plant features numerous advanced technology solutions combined with a fully integrated and automated SPX system for controlling all of the plant's floor equipment."

Thorsen adds that all this positions SPX well in a growing global demand for dairy where market share is just one reflection of a firm's place among the market leaders.

“If you look in terms of our technology portfolio, we are right up there," he says. “A lot of this technology, for goodness sake — we invented it."