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November 2, 2016

Fonterra accelerates UHT capacity expansion on China demand

Fonterra is bringing its planned investment in expanding capacity for UHT foodservice products forward to keep pace with "strong demand" in China. 

Fonterra is bringing its planned investment in expanding capacity for UHT foodservice products forward to keep pace with “strong demand” in China.

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The New Zealand dairy giant is adding a new production line at a domestic UHT facility in Waitoa through an investment programme of NZD12m (US$8.7m), which is now set for completion early next year. Fonterra had previously planned for the project to come online in 2018. 

Grant Watson, Fonterra’s director of global foodservice, said the acceleration of plans to supply China with more UHT is “exciting” for the business and noted the investment in the group’s foodservice business is “typically demand-led”. 

Watson said: “For foodservice products we build capacity based on secured customer orders. The fact we have needed to bring the project forward is a good sign of dairy’s growing popularity in China and points to the strength of our teams in market who are identifying that demand and converting it into sales.”

Fonterra said sales in its foodservice portfolio are growing at a rate of 15% year-on-year.

Robert Spurway, chief operating officer for Fonterra’s global operations, said the new line will be up and running by March next year and will bring the site’s total UHT capacity up to 112,000 packs per hour.

“This new line enables us to expand our operations to send more of our farmers milk to higher value products and keeps us on track to meet our ambition of foodservice becoming a NZD5bn business by 2023,” Spurway said.

The new line will be at full capacity by April next year and will create 14 full-time jobs at the site.

Related Companies

Free Whitepaper
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What is the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry?

While wanting to protect the country from being overwhelmed by Omicron, China’s adherence to a Zero-COVID policy is resulting in a significant economic downturn. COVID outbreaks in Shanghai, Beijing and many other Chinese cities will impact 2022’s economic growth as consumers and businesses experience rolling lockdowns, leading to a slowdown in domestic and international supply chains. China’s Zero-COVID policy is having a demonstrable impact on consumer-facing industries. Access GlobalData’s new whitepaper, China in 2022: the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry, to examine the current situation in Shanghai and other cities in China, to better understand the worst-affected industry sectors, foodservice in particular, and to explore potential growth opportunities as China recovers. The white paper covers:
  • Which multinational companies have been affected?
  • What is the effect of lockdowns on foodservice?
  • What is the effect of lockdowns on Chinese ports?
  • Spotlight on Shanghai: what is the situation there?
  • How have Chinese consumers reacted?
  • How might the Chinese government react?
  • What are the potential growth opportunities?
by GlobalData
Enter your details here to receive your free Whitepaper.

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