Fonterra to expand dairy operations in Victoria, Tasmania

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Fonterra Australia is matching its push to secure additional milk volumes with more than $165 million in capital expenditure in this financial year at key sites in Victoria and Tasmania in a move to increase capacity and meet unique demand opportunities for dairy.

The investment was first signalled by the dairy co-operative’s CEO Theo Spierings in November last year. It is made up of new investment of around AU$130 million to put in 500 million litres of additional capacity, and a further AU$35 million for a range of annual site improvements as part of its regular capital investment plan in Australia.

The expansion includes a $125 million expansion at Fonterra Australia’s flagship Stanhope cheese facility in northern Victoria which will double the size of the cheese plant; and a $12 million investment in Tasmania, which includes expansion to its Wynyard cheese plant and an increase in lactose processing capacity at Spreyton.

In addition, the company has announced a further AU$7 million expansion at the Darnum nutritionals plant in Gippsland as well as the installation of two robotic palletisers in Bayswater in eastern Victoria to improve efficiency; as well as $13.5 million for projects at Cobden and another AU$8.6 million at Dennington in western Victoria.

René Dedoncker, Managing Director of Fonterra Australia, says customers want trusted supply options out of Australia, especially for products like cheese, whey and nutritional powders which are in high demand.

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

He said Fonterra Australia will 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.