Dairy company Fonterra has announced a NZ15m (US$10.3m) upgrade for its Maungaturoto plant.

The work will centre around a major refurbishment of the site's two wholemilk powder driers, and is scheduled to be completed by August of next year, the company said.

Fonterra board member and Ruawai farmer Greg Gent said the site was an important part of the company's manufacturing operations. The planned work would ensure Northland milk was processed in Northland, and demonstrated Fonterra's continuing commitment to the region.

"Maungaturoto plays a key part in our overall processing strategy, and will continue to do so," said Gent.

Fonterra general manager New Zealand manufacturing Brent Taylor said the existing equipment was nearing the end of its useful working life. The upgrade would allow the introduction of more modern manufacturing techniques, which would reduce the potential for staff and product safety problems.

The upgrade also met the goals of Fonterra's energy efficiency project, which aimed at cutting the company's energy consumption by 10% through a combination of investing in new, energy-saving equipment and identifying more efficient ways of working.

Site manager Paul Henare said the powder plant would close in April next year, a few weeks earlier than normal, so that work would be completed in time for the start of the 2006/2007 processing season.