Synlait Milk Ltd., a New Zealand milk processing firm, will now have better chances of doubling its capacity at its South Island plant because of a new offer from Bright Dairy & Food Co.

Bright Dairy plans to pay $58 million for a 51 percent in Synlait Milk, Synlait said in a statement and confirmed in a conference call early today .

Synlait, 22.5 percent owned by Japan's Mitsui & Co., will retain a 49 percent stake and separately keep 100 percent ownership of its dairy farms in the biggest world's biggest diary exporter.

Synlait said it will increase the capacity at its South Island plant to about 100,000 metric tons of milk powder a year. Some of extra production will be specialist infant formulas, which will be sold in China in partnership with Bright Dairy.

Synlait Chief Executive Officer John Penno said on a conference call from the Dunsandel plant site: "Our strategy is all about us becoming a leading supplier of high value premium infant formula, particularly for the Asian market."

The approval is subject to regulatory approvals, including foreign investment clearance. The company doesn't anticipate any objections because the proposal involves a processing asset and not farm land, Synlait Chairman Graeme Milne said on the call.