Dairy co-operative, Fonterra, will be closing its canning and packaging facility in Hamilton at the end of July, citing the company’s revised strategy from September 2024 as the reasoning, which outlines a prioritisation of higher value ingredient production.
The Canpac site employs around 120 people, blending and packaging milk powders. The facility currently packs up to 4000 metric ton of powders per year, less than one per cent of the co-op’s total product volume.
Fonterra’s chief operating officer, Anna Palairet, said low product volumes and increasing complexities in production have created challenging economic conditions for the facility.
“It’s been a tough day for all the team at the site. Making decisions like this is never easy,” said Palairet.
“Our strategy is about creating end-to-end value and growing total returns for our farmer shareholders. We believe the best way to achieve this is to focus on our strengths and scale in ingredients and foodservice, and we are prioritising our investment on the parts of our operations that are better suited to this.
“We are committed to supporting our employees as we work through the next steps,” she said.
The co-op will now work through a consultation process including exploring potential redeployment opportunities before operations are planned to come to an end on 31 July 2025.
Fonterra reported a $1 billion operating profit for 1H25, with the company stating it showed good progress was being made on implementing its revised strategy. The co-op is also working towards its climate goals, with $150 million in electrification investments planned across New Zealand’s North Island over the next 15 months.
