Fonterra Co-op says its $66 million (NZ$75m) investment to expand the Clandeboye site in South Canterbury, New Zealand, is part of the co-op’s plan to invest $883 million (NZ$1b) over the next three to four years.
CEO, Miles Hurrell, said the project will improve operational cost efficiencies and generate more value for farmers.
It follows the co-op’s announcement last year that it would convert two coal boilers at the site to wood pellets, which was completed in August.
“We’ve said that through focused execution of strategy we are targeting our earnings to be back at FY25 levels by FY28 if the Mainland Group business is divested.
“This investment supports that goal by increasing our production of a high-value product and improving our product mix by adding value to milkfat,” said Hurrell.
The Clandeboye project will add a new line to expand current butter production by up to 50,000 MT per year and its range of butter formats to cater for the diverse requirements of global ingredients customers and professional kitchens.
Hurrell says global demand for butter continues to grow, and this investment positions Fonterra to better serve customers worldwide.
Fonterra COO, Anna Palairet, said the expansion of the Clandeboye site would strengthen Fonterra’s network in the South Island by improving flexibility and resilience.
“This investment is part of Fonterra’s broader strategic asset roadmap supporting long-term growth in high-value dairy categories. The expansion will create 16 new jobs at the site, supporting the local economy,” said Palairet.
Construction is due to start in December, with commissioning in early 2027, and the first product off the line in April 2027.
It is Fonterra’s third investment in the South Island in the past year, following the advanced protein hub at Studholme and UHT cream plant at Edendale.
