Fonterra Australia sees €107m expansion

Fonterra Australia is matching its push to secure additional milk volumes with over AU$165 million (€107m) in capital expenditure in this financial year at its Victoria and Tasmania sites.

The investment was first signalled by the dairy co-operative’s CEO Theo Spierings in November 2017. It is made up of a new investment of around AU$130m (€84m) to put in 500m litres of additional capacity. This includes a further AU$35m (€23m) for a range of annual site improvements as part of the company’s regular capital investment plan in Australia.

The new expansion includes:

• AU$125m (€81m) expansion at Fonterra Australia’s flagship Stanhope cheese facility in northern Victoria which will double the size of the cheese plant

• AU$12m (€8m) investment in Tasmania, which includes expansion to its Wynyard cheese plant and an increase in lactose processing capacity at Spreyton

• A further AU$7m (€4.5m) expansion at the Darnum nutritionals plant in Gippsland as well as the installation of two robotic palletisers in Bayswater in eastern Victoria to improve efficiency

• AU$13.5m (€8.7m) for projects at Cobden and another AU$8.6m (€5.6m) at Dennington in western Victoria.

René Dedoncker, managing director of Fonterra Australia, says, “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 says 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.

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

It is hoped that the investment will double the size of the cheese plant, increasing cheese production by a further 35,000 metric tonnes for a range of cheeses including cheddar and mozzarella. Stanhope can currently produce 45,000 metric tonnes of product including cheddar, mozzarella, gouda, parmesan, pecorino, romano and ricotta.

At Fonterra Australia’s largest site of Cobden, AU$13.5m (€8.7m) is earmarked for robotic palletisers and improvements to the butter plant that produces Australia’s leading butter brand of Western Star, while another AU$8.6m (€5.6m) is being invested at Dennington in a new 25kg packing line for nutritional powders and efficiency improvements.

It is hoped that the AU$9.7m (€6.3m) Wynyard investment will support an annual increase in cheddar cheese production by around 3,900 metric tonnes and increase the daily milk volumes processed from 1.3m litres to 1.5m.

At Darnum, the AU$7m (€5m) investment will support 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.

Fonterra Australia’s total milk intake is now two billion litres in Victoria and Tasmania, with the company employing an additional 15 drivers after investing more than AU$8m (€5m) in 14 truck and trailer units across its milk collection regions in Victoria and Tasmania.

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