More milk needed to fuel Fonterra expansion

By Dairy News

New Zealand dairy company Fonterra is looking into whether its Australian operation could become a co-operative, and will put information to its Australian suppliers in April.

Fonterra will be looking for up to 200 million litres of milk to satisfy its $165 million factory expansions across Victoria.

Managing director Rene Dedoncker said about $125 million would be spent on the company’s Stanhope cheese factory, which had only recently been upgraded.

“We are looking for the next 200 million litres of milk,” Mr Dedoncker said.

“We are seeing a boost in production, particularly in the north. We hope an extra 60 to 80 million litres will come from our own farmers.

“We do see the need for more farmers. We have a number interested in joining. It will be a mix.”

Mr Dedoncker said customers wanted trusted supply options out of Australia, especially for products like cheese, whey and nutritional powders, which were in high demand.

“We have a clear strategy that is delivering sustainable returns,” he said.

“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.”

Mr Dedoncker said Fonterra Australia would 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.

He said the Stanhope investment largely focused on expanding the site’s cheesemaking capacity and doubling the daily milk volumes it could process.

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.