Fonterra to upgrade Northland plant, buys Kapiti

By staff reporter

- Last updated on GMT

Related tags Milk Fonterra

New Zealand dairy firm Fonterra will spend around $15 million
upgrading its Northland site next year, it said today.

Existing equipment at the plant is at the end of its useful working life, according to Brent Taylor, head of manufacturing in New Zealand.

The upgrade, primarily of the site's two wholemilk powder driers, will allow the introduction of more modern manufacturing techniques, which would reduce the potential for staff and product safety problems, said the company.

It is scheduled to be completed by August of next year.

Site manager Paul Henare said the powder plant would close in April next year, a few weeks earlier than normal, so that work would be completed in time for the start of the 2006/2007 processing season.

Fonterra also announced this week that it was buying Kapiti Fine Foods from Foodstuffs Wellington.

The acquisition will is part of Fonterra's strategy to focus on strong brands that deliver faster growth and better margins.

Under the deal, Fonterra Brands will acquire a range of assets including production sites at Palmerston North and Paraparaumu, and the rights to supply the Pam's milk and cream brand in the lower-North Island.

"The Kapiti branded cheese and ice cream will provide a strong high-value brand in specialty segments,"​ said Fonterra Brands manager Khosla.

Foodstuffs Wellington chairman Brian Drake said the group had developed the Kapiti business as far as it can.

"The new structure would give the business renewed impetus and opportunities, and, of course, it would remain in New Zealand ownership,"​ he said.

The agreement is subject to approval from the New Zealand Commerce Commission (NZCC) and completion of the formal due diligence process, expected in the first quarter of next year.

Related topics Markets Fonterra Consolidation

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