New Zealand dairy cooperative Fonterra is to invest NZ$150 million (US$92.9 million) to build a new UHT cream plant at its Edendale site in Southland to meet growing consumer demand through its foodservice business.

The company currently has a foodservice business in Asia wher demand for integrating dairy into traditional foods such as laksa and milk tea is increasing.

In Malaysia, Fonterra is looking to build on solid foundations, as half of New Zealand’s exports to the country are already dairy.

High-value products

Fonterra CEO Miles Hurrell says the investment is part of the cooperative’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% 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,” he says.

“We believe prioritizing 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.”

Capacity growth

The new plant will initially create upward of 50 million liters of UHT processing capacity, with the capacity to grow beyond 100 million liters by 2030.

Fonterra COO Anna Palairet says the Edendale site is “set up for future growth,” with decarbonization work underway and a steady 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.”

The investment is also “good news for the South Island economy,” she shares.

“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.”

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.

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