Three-hundred jobs will be created with the development of a new freight transport hub just north of Hamilton.
Waikato freight hub Photo: Supplied/ Ports of Auckland
The Ports of Auckland-owned facility at Horotiu has now secured its first anchor tenant and work is underway on the 33ha site.
Work is underway on the first building on the site, a large warehouse for the hub's first customer, Open Country Dairy, New Zealand's second largest exporter of whole milk powder.
The Waikato freight hub will be the fourth in a network set up by the Ports of Auckland. Currently they have them at Wiri in South Auckland, Manawatu, and Mount Maunganui.
The key to the success of inland freight hubs is the close proximity to transport connections - in the Waikato it's right next door to the main trunk rail line and close to the Waikato Expressway.
Ports of Auckland chief executive Tony Gibson said the hub will take both exports and imports.
Chief Executive of Ports of Auckland, Tony Gibson Photo: RNZ/ Andrew McRae
"There is a migration south so you will see a lot more imports come into the Waikato region and what we can then use is those import boxes again, so what you are doing is commercialising the train both ways."
He said this will reduce the costs and provides, particularly with rail, a sustainable option.
The support shown by Open Country Dairy was a real boost to the project and it guaranteed its success, he said.
Work continues in regards to getting more clients and completing the rail infrastructure, he said.
"So the rail siding will be 700-metres long and we are right on the main trunk, so rail connected, and effectively we are looking for like-minded businesses that see an opportunity to be here."
Until the rail connection is operating, freight will be taken by road to Hamilton and loaded onto trains there.
Port of Auckland's general manager supply chain, Reinhold Goeschl, said with the freight hub placed at the heart of the golden triangle of Auckland, Waikato and Bay of Plenty, strong interest is expected from businesses.
"We are working at the moment with more than half a dozen different cargo owners conceptionally and with a couple in more detail, so this is the first step and we will add other facilities for other customers over the next couple of years."
The Port of Auckland freight hub will be in direct competition with a similar facility being developed on the south-eastern side of Hamilton at Ruakura.
Waikato freight hub construction site Photo: RNZ/ Andrew McRae
Mr Gibson believed the region was big enough for both of them.
"I think we are focussing on a different set of customers."
Pressure on Auckland will see more businesses move south, he said.
"A lot of the distribution centres in Auckland are in South Auckland around Penrose, Mount Wellington, and it's becoming quite costly to operate in Auckland."
Mr Gibson cites traffic congestion as one issue.
"So ultimately we see some of those businesses moving this way (south)."
Waikato District Council mayor Allan Sanson said the freight hub in his district will help stimulate growth, provide jobs, and take a lot of freight traffic off the roads.
It was part of the Hamilton to Auckland growth corridor, he said.
Waikato District mayor Allan Sanson Photo: RNZ/ Andrew McRae
"It's fair to say it's looking very bright and promising for us in the future around growth and not only residential level but also industrial and the last thing you need as a district is a whole lot of houses but no employment."
Open Country Dairy chief executive Steve Koekemoer said there is a huge advantage of having their warehouse located between New Zealand's two dominant ports, Auckland and Tauranga.
"Strategically the new Waikato hub will allow us to continue our export growth while lowering our costs and environmental footprint through greater use of rail."
The Ports of Auckland Waikato freight hub is due to open early next year.