Regional Victoria part of Fonterra's growth plan

More growth: Fonterra Australia managing director René Dedoncker says the company wants to further increase its milk supply and processing capacity.
More growth: Fonterra Australia managing director René Dedoncker says the company wants to further increase its milk supply and processing capacity.

Fonterra Australia plans to expand its milk supply and processing capacity in regional Victoria after establishing its place in the domestic market and as a global ingredients hub for cheese, whey and nutritionals, the company’s managing director says.  

René Dedoncker said Fonterra Australia was looking to grow to meet higher demand for dairy.

“With our plants full, we will be accelerating our capital investments in regional Victoria and Tasmania, playing to our strengths in cheese, whey and nutritionals,” Mr Dedoncker said.

“We have hit all of our performance targets, we have a clear strategy which is delivering and we have the right assets and product mix on the ground. 

“We are now looking to build on that base with further expansion linked to growing customer demand for consumer dairy, foodservice products and dairy ingredients.”

Australia is Fonterra’s largest milk pool outside New Zealand and continues to grow, with milk volume growing to two billion litres from 1.6 billion last season, a 20 per cent increase.

Fonterra Australia is owned by the New Zealand-based Fonterra Cooperative Group but is not a cooperative itself.

Mr Dedoncker said there was a waiting list for new suppliers to supply Fonterra Australia.

He said Fonterra had added 75,000 metric tonnes of capacity in the last 18 months through plant upgrades at its Cobden and Wynyard (Tasmania) factories and the rebuild of its Stanhope cheese plant.

“We are optimistic about export and domestic opportunities for growth and we bring the benefit of a global supply chain that’s integrated into our Australian milk pool,” Mr Dedoncker said. 

He said Fonterra would continue to work with Australian farmers to make the most of the global opportunities in dairy and ensure farmers shared in the benefit of the returns through a competitive and sustainable milk price.

In its 2016-2017 annual review, parent company Fonterra Cooperative Group was upbeat about the performance of its Australian arm, saying the successful turnaround of its Australian business contributed to a four per cent increase in normalised earnings in Oceania.

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