Fonterra has announced that it will invest $75 million to increase production of high-value protein dairy ingredients.
The New Zealand co-op is expanding its processing site at Studholme site on the South Island to create a hub for high value proteins.
The project will also support the conversion of Studholme’s existing coal boiler to a coal-free alternative, in line with Fonterra’s commitment to exit coal by 2037.
The facility currently specialises in producing milk powders, including standard and high heat whole milk powder (WMP), buttermilk powder and whey protein concentrate powder.
Some 250 million litres of milk goes into making standard WMP at Studholme every year, which is enough to fill 100 Olympic size swimming pools.
The majority of the final products produced at the site are sold internationally on the Global Dairy Trade (GDT) platform, which is partially owned by Fonterra.
Fonterra
Miles Hurrell, Fonterra chief executive, said that the investment is part of the co-op’s strategy to grow value through its ingredients business by partnering with customers who value Fonterra’s “unique offering”.
“We have valuable expertise in dairy science and innovation, making us leaders in the manufacture of dairy proteins and other advanced ingredient solutions.
“The expansion of our Studholme site will allow us to increase production of this high-value product and ultimately grow returns to farmers,” he said.
Richard Allen, Fonterra president global markets ingredients, said there is demand for dairy ingredients by customers globally.
“We see significant opportunities in the global high-protein dairy category, which is projected to grow by close to US$10 billion over the next four years, at an annualised growth rate of 7% per annum.
“Increasing our manufacturing capacity for functional proteins will enable us to continue to strengthen our offerings with existing customers as well as attract new business,” he said.
Site works at Studholme will begin next month with the first product due to come off the line in 2026.
In addition to producing advanced proteins, the site will continue to support the South Island’s milk processing as it has done since Fonterra acquired the site in 2012.
