Fonterra Australia has announced it is planning to grow its Australian milk supply and processing capacity.
Fonterra Australia managing director René Dedoncker said the business was generating sustainable returns and was now looking to grow to meet higher demand for dairy.
“We have a clear strategy which is delivering and we have the right assets and product mix on the ground,” Mr Dedoncker said.
“With our plants full we will be accelerating our capital investments in regional Victoria and Tasmania, playing to our strengths in cheese, whey and nutritionals.”
Fonterra has posted an 11 per cent decline in full-year profit as margins fell across its ingredients and consumer and food service divisions.
The NZ co-operative last month announced a profit of $745 million in the 12 months ended July 31, from $834 million a year earlier.
Sales rose to $19.2 billion from $17.2 billion while cost of sales climbed to about $16 billion from $13.6 billion.
Rising prices offset a three per cent decline in volumes at 22.9 billion litres of milk equivalent.
The final cash payout was $6.52 for the 2016–17 season, for a 100 per cent share-backed farmer.
The results include an impairment loss of $35 million on Fonterra’s investment in Beingmate, its distribution partner in China, reducing the carrying value to $617 million.