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Fonterra $32m cheese slice plant expansion

By Rachel Arthur+

19-Feb-2014
Last updated on 19-Feb-2014 at 14:50 GMT2014-02-19T14:50:59Z

Fonterra cheese slices expansion

Fonterra will invest $32m (USD $27m) in expanding its cheese slice plant in Taranaki, New Zealand. 

Its slice-on-slice cheese is used in fast food restaurants for products such as hamburgers and sandwiches.

René Dedoncker, director of foodservice, Fonterra, said the expansion is responding to demand in Australasia, Asia and the Middle East.

Growth in Asia

Our foodservice business has grown 9% in volume over the past three years and the profitability of foodservice has increased 11% in the same period,” he said.

Our results last year showed a 45% normalised EBIT [earnings before interest and taxes] growth for our Asia, Africa and Middle East business. We also achieved double digit growth in China where foodservice grew 28%.” 

International growth in cheese is being driven by trends to eat out, particularly in emerging Asian economies which are shifting towards more westernised diets, he added.

Work on Fonterra’s site in the town of Eltham will start in early 2014 and is expected to be completed in mid 2015. The expanded plant will increase capacity and improve processes, the company said.

Large plant

The site currently produces 70,000 tonnes of cheese and employs 550 people. It is one of the largest consumer and foodservice cheese manufacturing plants in Australasia, the company claims.

Driving the foodservice business is one of Fonterra’s strategies for the coming years, Dedoncker added. This category includes fast food restaurants, bakeries, cafes, hotels and airline caterers.

Fonterra is a co-operatively-owned company based in New Zealand. It produces more than 2m tonnes of dairy ingredients every year with 95% of these exported around the world.