Fonterra Invests $75 Million to Expand Butter Production

Fonterra Co-operative Group is making a substantial NZD 75 million investment to expand its butter production capabilities at the Clandeboye site in South Canterbury. This initiative is part of a broader strategic plan outlined in the company's FY25 Annual Results, which includes a potential investment of up to $1 billion over the next few years to increase value for farmers and improve operational efficiencies.

CEO Miles Hurrell expressed confidence in the strategy, aiming to restore earnings to FY25 levels by FY28, assuming the divestment of the Mainland Group business proceeds. A new butter line at Clandeboye will enhance production capacity by 50,000 MT annually, catering to global markets with products meeting a variety of certifications, including Halal and Kosher.

Chief Operating Officer Anna Palairet highlighted the project's role in strengthening Fonterra's South Island network, emphasizing increased flexibility, resilience, and local economic benefits through the creation of 16 new jobs. Construction will commence in December 2025, with operations expected to start by April 2027.

This project follows two other significant investments in the region: NZD 75 million in a protein hub at Studholme and NZD 150 million in a UHT cream plant at Edendale. Additionally, Fonterra allocated NZD 64 million for the transition of two coal boilers to wood pellets at Clandeboye, reflecting its commitment to phasing out coal by 2037.

Fonterra's lactic and unsalted butters cater to diverse culinary needs globally, sold under the NZMP and Anchor Food Professionals brands, contributing to the premium market segment with products suited to a range of applications from bakery goods to traditional Chinese pastries.