Fonterra will invest $75 million to expand butter production at its Clandeboye site in South Canterbury.
The investment will fund construction of a new butter line, increasing production capacity by up to 50,000 metric tonnes a year. Construction is set to begin in December 2025, with commissioning scheduled for early 2027 and first product expected off the line in April 2027.
Miles Hurrell, CEO of Fonterra, said the project supports Fonterra’s goal of lifting earnings and adding value to milkfat products.
“We’ve said that through focused execution of strategy we are targeting our earnings to be back at FY25 levels by FY28 if the Mainland Group business is divested.
“This investment supports that goal by increasing our production of a high-value product and improving our product mix by adding value to milkfat.”
The new facility will produce a range of butter formats for both global ingredients customers and professional kitchens, including Halal and Kosher-certified products to serve key export markets.
Hurrell said global demand for butter continues to grow and the investment positions Fonterra to better meet customer needs worldwide.
Anna Palairet, Chief Operating Officer at Fonterra, said the expansion would also strengthen Fonterra’s South Island operations.
“This investment is part of Fonterra’s broader strategic asset roadmap supporting long-term growth in high-value dairy categories. The expansion will create 16 new jobs at the site, supporting the local economy.”
The Clandeboye project is Fonterra’s third major South Island investment in the past year. It follows a $75 million advanced protein hub at Studholme, due for completion in early 2026, and a $150 million UHT cream plant at Edendale, expected to be completed in the second half of 2026.
Fonterra also recently completed a $64 million conversion of two coal boilers to wood pellets at Clandeboye, part of its plan to exit coal use by 2037.
Hurrell said the Co-operative expects to invest up to $1 billion over the next three to four years in projects that deliver value for farmers and improve operational efficiency.
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