October 21, 2013

Fonterra to invest US$72 million in its mozzarella plant expansion

 

In order to further expand its global foodservice capabilities, Fonterra announced its plans to invest US$72 million at its Clandeboye mozzarella plant.

 

The foodservice category includes full and quick service restaurants, institutions, hotels, airline catering facilities and other commercial kitchens. The investment is the final stage of a technology upgrade that will double the capacity of the Clandeboye plant in Canterbury to produce individual quick frozen (IQF) grated mozzarella. When fully implemented, this will increase Fonterra's IQF mozzarella capacity across its two plants in New Zealand to over 50,000 tonnes annually.

 

To be able to meet growing international demand, additional capacity is required, primarily in global fast food restaurant chains, supported by growth in regional fast food and fine dining restaurants.

 

Clandeboye uses a manufacturing process that was developed by the Fonterra Research and Development Centre. This world-leading patented technology means that frozen natural shredded mozzarella can be made straight from milk in one day, rather than two months taken by conventional mozzarella processes.

 

This is a great example of the type of process and product technology development work being undertaken by Fonterra.  Fonterra is driving further enhancement of this technology in partnership with the Ministry for Primary Industries, through the Primary Growth Partnership (PGP) initiative.

 

Fonterra Director of Foodservice, René Dedoncker says that growth in the global foodservice category is being driven out of emerging Asian markets where the category is estimated to grow at around 13% annually to 2016.

 

Earnings potential in the foodservice category is well recognised by Fonterra. Dedoncker says the foodservice category is one of seven strategic paths identified in the Co-operative's business strategy and it was one of the stand-out performers in Fonterra's annual results released at the end of September.

 

"Our progress last year shows that our strategy is delivering the results we want in our priority areas. A good example is our Asia, Africa and Middle East business where we achieved a 45% normalised earnings before interest and taxes (EBIT) growth in foodservice. We also achieved double digit growth in China where foodservice grew 28%."

 

With demand for out-of-home meals increasing annually, Fonterra expects sales in this category to grow further. The Clandeboye plant upgrade will begin in mid-2014 and is due to be completed by September 2015.

 

Fonterra is a global leader in dairy nutrition - the preferred supplier of dairy ingredients to many of the world's leading food companies. It is the largest processor of milk in the world, producing more than two million tonnes of dairy ingredients, value added dairy ingredients, specialty ingredients and consumer products every year.