New Zealand dairy co-operative Fonterra plans to invest NZD100m (US$82m) to double its UHT milk supply in order to service emerging markets in Asia.

Fonterra said today (27 February) that it will spend more than NZD100m to build a new UHT milk processing plant at its Waitoa site in Waikato.

“The new plant will enable us to increase our UHT production by 100% over the next few years,” said Fonterra’s CEO, Theo Spierings. “Products from the new plant will be bound for Asia markets.”

Supplying the plant year-round will require more Fonterra farmers to sign winter contracts, which will include a premium price because winter months are outside of the traditional milk supply season. An initial survey in New Zealand’s North Island suggests “a good proportion” of farmers would be keen to sign a winter contract, said Spierings.

The new plant will predominantely produce UHT milk and cream for foodservice sectors. Meanwhile, domestic UHT milk production, including supply for Fonterra Milk for Schools, will be concentrated at the firm’s Takanini facility in Auckland.

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By GlobalData