Giant dairy plant for south Friday, 01 February 2008
Fonterra will spend $212 million on a milk powder plant at Edendale to meet expected growth in supply in Southland.
The expansion plans, unveiled by the cooperative yesterday, will boost the site's processing capacity from 10.6 million litres a day to more than 15 million litres.
Chief executive Andrew Ferrier said the development represented a 40 per cent increase in volume and reflected the cooperative's growth strategy in action.
The expansion would make Edendale Fonterra's largest milk-processing plant in New Zealand and perhaps the world.
Edendale ranks third at present, behind Whareroa, in south Taranaki, and Clandeboye near Timaru.
The new plant is scheduled to process milk at the start of the 2009-10 season and will manufacture regular UHT and instant wholemilk powders.
About 40 jobs will be created.
Poor lamb returns and high milk prices have made Southland one of the fastest-growing dairy regions and about 100 new conversions are expected next season.
Mr Ferrier said that though prices were softening from last year's record highs, overall demand for dairy products was growing about 3 per cent a year, with demand particularly strong in China, Latin America and the Middle East. Domestic markets were growing at a similar rate. "The investment is a vote of confidence for Fonterra, and the New Zealand dairy industry.
"It also recognises Edendale's reputation for the highest product quality and its particular expertise in powder production."
Mr Ferrier said he was confident of recruiting more suppliers to meet the extra capacity and Fonterra would compete aggressively with the new Dairy Trust.
Along with whole, skim and buttermilk powders, the Edendale site produces cheddar for Japan, the Middle East and the Philippines, and refined and edible grade lactose, whey, cheese, casein, anhydrous milk fat and whey protein concentrate.
