Fonterra to invest in new UHT milk plant in New Zealand

New Zealand-based multinational dairy co-operative Fonterra is set to invest more than $100m in a new ultra-high temperature (UHT) milk processing plant at its Waitoa site in Waikato.

As part of the co-operative’s efforts to cater to the growing demand for UHT products in Asia, the new plant will increase Fonterra’s UHT production by 100% over the next few years.

The facility will feature five new UHT lines that will produce a variety of products including UHT white milk and UHT cream for the foodservice sector.

Fonterra chief executive officer Theo Spierings said that the development will create around 50 new jobs and provide opportunities for Fonterra farmers in the North Island.

"Products from the new plant will be bound for Asia markets and that will allow us to concentrate all our domestic UHT production – including Fonterra Milk for Schools – at Takanini in Auckland," Spierings added.

In order to provide a year-round supply of milk to its plants, the company is planning to offer winter milk contracts to more farmers, which will enable them to take advantage of the milk price premium that these contracts include.

Meanwhile, Fonterra has announced a five-point plan which gives its farmer shareholders more flexibility in managing their farm businesses in order to support and grow milk production.

The plan comprises a bonus issue of one additional share or unit for every 40 held on 12 April 2013; a further supply offer allowing the company’s shareholders to sell the economic rights of some of their shares into the Fonterra Shareholders’ Fund; and a dividend reinvestment plan enabling shareholders and unit holders to elect to receive dividends in the form of shares or units.

The plan also includes providing flexible contracts to give new and growing farmers more time and options to completely back their milk production with Fonterra shares; and offering new opportunities for winter milk supply contracts in the upper North Island to drive Fonterra’s new UHT plant at Waitoa.

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Image: Fonterra’s new facility will feature five new UHT lines that will produce a variety of products, including UHT white milk and UHT cream. Photo: Fonterra Co-operative Group.