NEW ZEALAND – Fonterra has announced a significant investment of US$150 million to build a new UHT cream plant at its Edendale site in Southland, New Zealand.
This expansion is part of the cooperative’s strategy to capitalize on the growing demand for dairy products, particularly in Asia, where the integration of dairy into traditional foods such as laksa and milk tea is increasingly popular.
The new plant will initially add 50 million liters of UHT processing capacity, with the potential to exceed 100 million liters by 2030.
The project is expected to create 70 new jobs at the Edendale site, with additional employment opportunities during the construction phase, which is set to begin early next year. The first products are anticipated to roll off the production line by August 2026.
Fonterra CEO Miles Hurrell, who announced the investment during a senior New Zealand business delegation visit to Malaysia, emphasized that the expansion is crucial for enhancing the cooperative’s value proposition by increasing production capacity for high-value products.
“Demand for UHT cream continues to strengthen globally, with projections indicating a more than 4% annual growth rate between 2023 and 2032,” Hurrell said.
“This investment reflects our commitment to growing value for the cooperative by expanding our capabilities in the Ingredients and Foodservice channels.”
The new plant at Edendale will not only boost Fonterra’s production capacity but also contribute significantly to the local economy.
Hurrell added that this is the second major expansion the cooperative has announced in just a few weeks, signaling a strong strategic direction.
Fonterra COO Anna Palairet highlighted the strategic benefits of the Edendale site, noting that it is well-positioned for future growth, with ongoing decarbonization efforts and a strong supply of high-quality cream in the region.
“The additional processing capacity will enable us to manufacture more UHT cream products, thereby increasing value for our farmers,” Palairet stated.
Fonterra to invest in expanding Studholme facility
This investment in Edendale follows closely on the heels of Fonterra’s recent expansion announcement at its Studholme site with an investment of US$47.13 million.
The investment aimed at enhancing the cooperative’s production capabilities for high-value protein ingredients, aligning with Fonterra’s broader goal of strengthening its position in the global dairy market, particularly in the rapidly growing high-protein segment.
The expansion will transform the Studholme site into a hub for producing advanced protein ingredients, catering to the increasing global demand for high-protein dairy products, which is expected to grow by nearly US$10 billion over the next four years.
The Studholme facility currently specializes in producing a range of dairy powders, including whole milk powder (WMP), buttermilk powder, and whey protein concentrate powder. The majority of these products are sold internationally through the Global Dairy Trade (GDT) platform.
With the expansion, the site will bolster its capacity to produce functional proteins for premium applications, such as medical and sports nutrition, which are increasingly sought after by manufacturers worldwide.
In addition to enhancing production capabilities, the project includes converting Studholme’s existing coal boiler to a coal-free alternative, aligning with Fonterra’s commitment to eliminate coal use by 2037.
The expansion, which is set to begin next month, will create six new jobs at the facility, with additional contractors expected to be sourced from the Canterbury region. The first products from the expanded facility are anticipated to be available by 2026.
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