New Zealand’s Fonterra is set to invest NZ$150m ($92.8m) to build a new ultra heat treated (UHT) cream plant in its home market.
The dairy group said the plant will be at its Edendale site in Southland to “meet growing demand through its foodservice business” in Asia.
The cream plant will initially create upward of 50 million litres of UHT processing capacity with the capacity to grow beyond 100 million litres by 2030.
COO Anna Palairet said that an additional 70 jobs will be created at the new facility. Fonterra added that “additional employment opportunities will also be created through the construction phase”, which is scheduled to start early next year. The first products are expected to come off the line in August 2026.
Chief executive Miles Hurrell said: “Demand for UHT cream continues to strengthen. Globally, we’re expecting demand to increase by more than 4% year-on-year between 2023 and 2032.
“This is the second announcement we’ve made in as many weeks about expansions at our sites to cater for growing demand. We believe prioritising our ingredients and foodservice channels will create more value for Fonterra and this expansion is a good example of the direction the co-op is heading.”
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Established in 1881, the Edendale site is New Zealand’s oldest dairy processing site, according to Fonterra. It currently employs more than 670 people, with ten plants and processes up to 15 million litres of milk per day.
Last month, Fonterra raised its forecast on farmgate milk process on the back of stronger commodity prices.
The co-operative announced a NZ$0.50 cent increase in the mid-point of its forecast farmgate milk price for the 2024/25 season and advised its 2024 financial year earnings are forecast to be “at the top end” of the announced range of 60-70 cents per share.
In May, the co-op announced plans to exit its consumer-facing business to focus on ingredients in what group described as a “step-change in strategic direction”.
Hurrell said at the time the process was expected to take “at least” 12 to 18 months, should it proceed, amid “unsolicited interest in parts of these businesses”.
He then added: “We believe we can grow further value for the co-op by focusing on being a B2B dairy nutrition provider, working closely with customers through our high-performing ingredients and foodservice channels.”
