Fonterra whips up NZ$150m for UHT cream plant in NZ

Fonterra is set to invest $150 million to build a new UHT cream plant at its Edendale site in Southland to meet growing demand through its Foodservice business, which is thriving in Asia.

Demand for UHT cream continues to strengthen, according to Fonterra CEO Miles Hurrell. In Asia, the demand is growing by integrating dairy into traditional foods such as laksa and milk tea. “Globally, we’re expecting demand to increase by more than 4% year on year between 2023–2032*,” Hurrell said.

The new plant will initially create upward of 50 million litres of UHT processing capacity with the capacity to grow beyond 100 million litres by 2030.

Claimed to be New Zealand’s oldest dairy processing site still in operation, the Edendale site was first established in 1981. It was also said to be the first site in New Zealand to export refrigerated cheddar cheese and butter to global markets. Now celebrating over 140 years, the site currently consists of 10 plants (soon to be 12) with processing capacity of up to 15 million litres of milk per day, with 14 million bags of milk powder exported each year.

The UHT Whipping Cream formulation was developed by Fonterra’s Research and Development Centre and is used in around 260m cakes in Chinese bakery stores each year, as well as 400 million beverages — demand has continued to increase since 2014.

Fonterra COO Anna Palairet says the Edendale site is well set up for future growth, with decarbonisation work well underway along with a good supply of high-quality cream in the region.

“The additional processing capacity will allow us to manufacture more UHT cream products and grow value for farmers.”

And, she adds, the investment is also good news for the South Island economy.

“Adding to the six new roles created through the recently announced expansion at our Studholme site, we will create an additional 70 new jobs with this new plant at Edendale. This is great news for the local community.”

Additional employment opportunities will also be created through the construction phase, which is scheduled to start early next year. The first product is expected to come off the line in August 2026.

_{*Fortune Business Insights}

Top image credit: iStock.com/Keys