Fonterra Australia increases milk capacity with US$133m investment

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25 Jan 2018 --- In a bid to grow milk volumes to keep pace with increasing dairy demand, Fonterra Australia is investing AU$165 million (US$133 million) at key sites in Victoria and Tasmania. The expansion will seriously ramp up output from its Australian operations and supports Fonterra’s aim to “stay ahead of the demand curve”.

The new expansion includes a AU$125 million (US$101 million) expansion at Fonterra Australia’s flagship Stanhope cheese facility in northern Victoria which will double the size of the cheese plant and a AU$12 million (US$9.6 million) investment in Tasmania, which includes expansion to its Wynyard cheese plant and an increase in lactose processing capacity at Spreyton. It also includes a further AU$7 million (US$5.6 million) expansion at the Darnum nutritional plant in Gippsland, as well as the installation of two robotic palletisers in Bayswater in eastern Victoria to improve efficiency. There will also be AU$13.5 million (US$10.8 million) for projects at Cobden and another AU$8.6 million (US$6.9 million) at Dennington in western Victoria.

 

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Fonterra Australia Managing Director ReneĢ Dedoncker
René Dedoncker, Managing Director of Fonterra Australia, says customers want trusted supply options out of Australia, especially for products like cheese, whey and nutritional powders which are in high demand.


“We have a clear strategy that is delivering sustainable returns. To create value, we need to invest to stay ahead of the demand curve. These investments support our aim to secure positive returns back to our farmers on both sides of the Tasman.”


He adds how Fonterra Australia will play to its strengths in cheese, whey, nutritionals and butter, increasing production capacity to meet rising domestic and global demand, but filling its expanded capacity would mean securing more supply.


The Stanhope investment largely focuses on expanding the site’s cheese making capacity and doubling the daily milk volumes it can process.


The investment will double the size of the cheese plant, increasing cheese production by a further 35,000 metric tons for a range of cheeses including cheddar and mozzarella.


Stanhope can currently produce 45,000 metric tons of product including cheddar, mozzarella, gouda, parmesan, pecorino, romano and ricotta.


Investments in nutrition and robotics
At Fonterra Australia’s largest site of Cobden, AU$13.5 million (US$10.8 million) is earmarked for robotic palletisers and improvements to the butter plant that produces Australia’s leading butter brand of Western Star, while another AU$8.6 million (US$6.9 million) is being invested at Dennington in a new 25kg packing line for nutritional powders and efficiency improvements. 


The AU$9.7 million (US$7.8 million) Wynyard investment will support an annual increase in cheddar cheese production by around 3,900 metric tons and increase the daily milk volumes processed from 1.3 million liters to 1.5 million.


At Darnum, the AU$7 million (US$5.6 million) investment will support a higher production of nutritional powders, whole and skim milk powders for the domestic and international export markets.


In total, the capacity investments will create around 36 jobs, in addition to generating construction work during the development phase.


Dedoncker says more capacity needs more milk and Fonterra Australia is working hard to secure this.


“Our Australian milk pool has grown by 400 million liters this season and with this new investment we plan to grow our milk further which we expect will come through growth from our existing farmers who wish to grow, coupled with milk from new suppliers joining Fonterra,” he says.


Fonterra Australia’s total milk intake is now 2 billion liters in Victoria and Tasmania, with the company employing an additional 15 drivers after investing more than AU$8 million (US$64.5 million) in 14 truck and trailer units across its milk collection regions in Victoria and Tasmania.