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Fonterra to invest $133.5m to expand dairy operations in Victoria, Tasmania

FBR Staff Writer Published 25 January 2018

Fonterra Australia is investing over A$165m ($133.5m) at its sites Victoria and Tasmania in order to increase capacity and meet increasing demand for its dairy products.

While A$130m ($105.2m) will be invested to achieve 500 million litres of additional capacity, an additional A$35m ($28.3m) will be spent for a range of yearly site improvements as part of the group’s regular capital investment plan in Australia.

Fonterra Australia managing director René Dedoncker said that customers are looking for trusted supply options out of Australia, particularly for high demand products like cheese, whey and nutritional powders.

Dedoncker added: “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.”

The bulk of the investment, A$125m ($101.2m) will be made for the expansion of the Stanhope cheese facility in northern Victoria.

The cheese plant of Fonterra Australia is expected to be doubled in size through the investment. It is anticipated to increase its cheese production by an additional 35,000 metric tonnes for a variety of cheeses such as cheddar and mozzarella.

The Stanhope cheese facility was reopened officially in August 2017 after an A$140m ($113m) rebuild and expansion.

Fonterra Australia Stanhope site manager Jason Wright said that the facility is considered as a key asset in the company’s move to make the most of domestic and international demand opportunities for products such as cheese.

Wright added: “It’s important for dairy in Australia that we’re showing confidence and investing in expansion. We believe in the long term demand prospects for dairy, and especially for cheese given the growth we’ve seen in foodservice.”

Other plants to be expanded as part of the new investment include the Wynyard cheese plant and Spreyton facility in Tasmania, the Darnum nutritionals facility and the Bayswater plant in eastern Victoria along with the Cobden and Dennington sites in western Victoria.

Image: Fonterra Australia managing director René Dedoncker. Photo: courtesy of Fonterra Co-operative Group.