Fonterra is to build a “high efficiency” milk powder drier plant and boost milk processing capacity in New Zealand as it eyes higher-margin products.

The dairy giant is investing NZ$555m (US$464.6m) into the construction of a milk powder drier in New Zealand’s North Island and upping capacity in the South Island.

Fonterra plans to build a drier at the Lichfield site in South Waikato capable of processing up to 4.4m litres per day.

Meanwhile, three plants will be installed at Fonterra’s Edendale site in Southland. One will be a milk protein concentrate facility that separates protein from skim milk and turns it into protein powder. A second, a reverse osmosis plant, will increase capacity on an existing drier by 300,000 litres per day. The investment will also see an anhydrous milk fat plant capable of processing 550,000 litres of milk into cream per day.

“Our strategy is to increase earnings by driving more milk volume into higher value categories globally by turning the wheel from commodities to higher-margin products,” said Fonterra CEO Theo Spierings. “By creating more options for our New Zealand operations we are better placed to be able to make the product mix that delivers the greatest returns to our farmers and meet the needs of our consumers and customers worldwide.”

The completion of the Lichfield and Edendale projects will see a further 75 jobs created.

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By GlobalData