Fonterra is set to invest $150 million to build a new UHT cream plant at its Edendale site in Southland to meet growing demand through its Foodservice business.
Fonterra CEO Miles Hurrell shared the news while in Malaysia today on a senior New Zealand business delegation with the Prime Minister.
Fonterra has a thriving Foodservice business in Asia where demand is growing by integrating dairy into traditional foods such as laksa and milk tea. In Malaysia, Fonterra is looking to build on solid foundations where half of New Zealand exports to the country are already dairy.
Miles Hurrell says the investment is part of the Co-operative’s strategy to grow further value by expanding its Foodservice business in Asia and increasing production capacity for high-value products.
“Demand for UHT cream continues to strengthen. Globally, we’re expecting demand to increase by more than 4 per cent year on year between 2023 – 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,” says Mr Hurrell.
The new plant will initially create upward of 50 million litres of UHT processing capacity with the capacity to grow beyond 100 million litres by 2030.
Fonterra COO Anna Palairet says the Edendale site is well set up for future growth with decarbonisation work well underway along with a good supply of high-quality cream in the region.
“The additional processing capacity will allow us to manufacture more UHT cream products and grow value for farmers.”
And she adds, the investment is also good news for the South Island economy.
“Adding to the six new roles created through the recently announced expansion at our Studholme site, we will create an additional 70 new jobs with this new plant at Edendale. This is great news for the local community.”
Additional employment opportunities will also be created through the construction phase, which is scheduled to start early next year. The first product is expected to come off the line in August 2026.
About UHT Whipping Cream
The formulation for this cream, renowned by its exceptional performance and stability, was developed by Fonterra’s Research and Development Centre, an excellent example of how Fonterra uses innovation to add value to farmers’ milk.
This cream is used in approximately 260 million cakes in Chinese bakery stores each year, as well as 400 million beverages – demand has continued to increase since 2014.
Fonterra is a market leader in China. Maintaining Fonterra’s application advantage is a key innovation focus, and a driver behind our investment in Application Centres in China.
For its superiority in performance and provenance, whipping cream is a hero product in Southeast Asia’s professional kitchens, accounting for over 70% of the region’s cream portfolio.
By extending new applications to local cakes, puddings and beverages, where coconut milk is traditionally a staple, it helps to extend shelf-life of customer products while providing dairy goodness to Asian flavours.
About Edendale
Established in 1881, the Edendale site is New Zealand’s oldest dairy processing site. It was the first site in New Zealand to export refrigerated cheddar cheese and butter to markets around the world.
It currently employs more than 670 people. The expansion will increase this to around 740.
Currently it has 10 plants and processes up to 15 million litres of milk per day.
Edendale site fact sheet https://view.publitas.com/fonterra-comms/edendale_site-facts_2024-1-4kdj8prazqlb/
*Fortune Business Insights
About Fonterra
Fonterra is a co-operative owned and supplied by about thousands of farming families across Aotearoa New Zealand.Through the spirit of co-operation and a can-do attitude, Fonterra’s farmers and employees share the goodness of our milk through innovative consumer, foodservice and ingredients brands. Sustainability is at the heart of everything we do, and we’re committed to leaving things in a better way than we found them. We are passionate about supporting our communities by Doing Good Together.
