Fonterra Australia, the Australian division of New Zealand-based Fonterra Co-operative Group, announced plans to construct a state-of-the-art cheese manufacturing plant at its existing Stanhope facility in northern Victoria, in December 2015.

The new plant will replace the Stanhope factory’s hard cheese plant, which suffered fire damage in 2014. It will produce and supply a variety of cheeses to Australian consumers, foodservices and exporters.

The new investment is a part of Fonterra’s multi-hub strategy, which enables its Australian business to play to its ingredients strengths in cheese, whey and nutritionals. It is also expected to help the Victorian economy as it requires significant growth of the local milk pool by 2020, creating a solid future for the dairy industry in northern Victoria.

Construction of the new cheese facility is scheduled to begin in 2016 and complete in 2017. The project is expected to create 75 construction jobs during the building and commissioning phases and 30 new jobs at the plant, besides retaining the 120 existing jobs at the Stanhope factory.

Stanhope factory modernisation and expansion project details

The new facility will be larger than the older one and will feature modern infrastructure. The modernisation and expansion project will envisage demolition and reconstruction of the fire-damaged cheese plant, installation of modern cheese processing equipment, and the construction and installation of a modern mozzarella cheese producing facility.

Production details of Fonterra’s new cheese facility

Ever since the Stanhope cheese facility was damaged, hard cheese production at the site was halted. The cheese production will resume with the commissioning of the new facility.

The new plant will produce 45,000t of cheeses a year, an increase of 15,000t over the previous plant. It will produce a variety of cheeses, including parmesan, gouda and mozzarella.

Fonterra will market the cheeses under brand names such as Bega, Mainland and Perfect Italiano.

The state-of-the-art facility, with the increased plant capacity, will reinstate the whey production at the plant. The produced whey will be supplied to Fonterra’s Darnum and Dennington plants.

Financing for Fonterra’s new cheese facility

Fonterra will invest NZ$141m ($90.7m) for the construction of the new plant. The project is being supported by the Victorian government through its $500m Regional Jobs and Infrastructure Fund.

Fonterra’s Stanhope factory details

The Stanhope factory was established in 1923 and processes 1.2 million litres of milk a day, collected from 260 surrounding farms in northern Victoria.

"The new plant will replace the Stanhope factory’s hard cheese plant, which suffered fire damage in 2014."

With an annual production of more than 50,000t, the factory produces Perfect Italiano cheeses, cheddar, powders, ghee, anhydrous milk fat, whey powders and milk powders for markets across the globe.

The facility was upgraded with an investment of A$6.5m in 2012 and with a further investment of A$10m during 2014.

Marketing commentary on Fonterra

Fonterra operates ten manufacturing sites across Australia, including five in Victoria. Fonterra Australia is the biggest milk pool outside New Zealand. It stands at the top with 23% market share in the A$1.95bn retail cheese business.

With a long history in dairy and a strong reputation for safe, secure and high-quality milk, the Australian dairy industry is poised for growth. Fonterra wants to capitalise on this growth to become a leader in the Australian market.

The Australian company is focusing on optimal product mix, leveraging its global multi-hub strategy and sales network, expanding its foodservice business, and growing market-leading brands and nutritional business.