Fonterra commissioned its new dairy ingredients plant in the Netherlands in February 2015.

Fonterra Co-operative Group, a dairy firm based in New Zealand, began operations at its newly constructed dairy ingredients plant in Heerenveen town located north of the Netherlands in February 2015.

The new plant is Fonterra’s first wholly-owned and operated ingredients plant in Europe, developed in collaboration with A-ware Food Group, a cheese manufacturer based in the Netherlands.

The plant produces specialty milk ingredients including whey and lactose that will be used in the production of nutrition products such as high-value paediatric, maternal and sports nutrition products.

With this investment, Fonterra aims to strengthen its ability to deliver high-quality products to European customers, as well as global consumers. The plant currently employs 50 workers.

Fonterra’s partnership with A-ware Food Group in the Netherlands

“The plant produces specialty milk ingredients including whey and lactose that will be used in the production of nutrition products such as high-value paediatric, maternal and sports nutrition products.”

Fonterra partnered with A-ware Food Group to develop two separate, but mutually beneficial neighbouring plants in Heerenveen in March 2013. According to the agreement, the partnership had to develop a cheese plant and a dairy ingredients plant on a 25ha greenfield site in Heerenveen.

The main reason for establishing the two plants on the same site is to allow Fonterra to use liquid whey from A-ware’s cheese production plant in the production of dairy ingredients.

The cheese plant, commissioned in December 2014, is being operated by A-ware Food Group and produces cheese for its European customers. The dairy ingredients plant is owned and operated by Fonterra and produces whey and lactose, which will be further processed into premium nutrition products.

The partnership allows Fonterra to access 600-800 million litres of milk in the European market, while it enables A-ware to expand its service offering to the growing European customer base.

Production at the new dairy ingredients plant in Heerenveen

The new plant operates around-the-clock throughout the year to produce whey protein concentrates (WPC80), whey protein isolates (WPI) and lactose. It is designed to produce 5,000-6,000 metric ton (mt) of WPC80 and approximately 25,000mt of lactose a year.

In addition, the plant also produces 100,000mt of Gouda cheese and is equipped to process derived whey solids. Whey protein concentrates and isolates production and benefits.

Whey protein concentrates and isolates are manufactured from fresh cheese or acid whey using an ultra-filtration process. They are typically processed at low temperatures to retain nutritional and functional properties.

Whey proteins provide functional benefits such as emulsifying, foaming and water binding and are used in a variety of food applications including beverages, yoghurts and dairy desserts.

Background and objectives of Fonterra’s Heerenveen investment

The facility will produce specially formulated milk powder to be used in specific types of high-quality infant nutrition for toddlers and babies over the age of two.

With the current investment in Heerenveen, Fonterra aims to expand its supplies to three key markets including China, Japan and Europe. In China, the company already has a strong market presence with products sourced from New Zealand.

Japan is found to be a high-value market as the imports for whey protein concentrates and isolates have been growing at a 4% compound annual growth rate (CAGR) volume basis for the last five years.

The increase in demand is due to the changing opinion trend in using cultured and sports / active lifestyle products.

The market for whey products in Europe is gradually gaining pace as consumers have started to realise its health benefits. The sports nutrition market witnessed significant growth as consumers are becoming more health-conscious and increasingly aware of whey protein benefits.

Fonterra wanted to take advantage of these key markets by supplying reliable and high-quality dairy ingredients.

Marketing commentary

Fonterra is a global dairy ingredients firm owned by local farmers in New Zealand. It is the world’s biggest milk processor, producing more than two million tonnes of dairy ingredients every year. It established a strong presence with a number of brands in Australia, New Zealand, Asia, Africa, the Middle East and Latin America.