July 4, 2011

 

Fonterra invests in Darfield's plant

 

 

Dairy giant Fonterra wants to put in an additional NZD250 million (US$ 207.5 million) to treble milk output at its Darfield site with a new dryer competing to be the biggest in New Zealand.

 

The co-operative entered talks about stage two of the project with neighbours at a community meeting on Friday (Jul 1) and is about to begin the consent process. The plan is to have the second dryer built by 2015 as the NZD200 million (US$166 million) site, still being constructed, is expected to be at full capacity by then.

 

At 30 tonnes of powder an hour, the spray drying unit would increase milk processing three-fold to 7.5 million litres a day and the workforce would double to more than 100.

 

The first stage is set to be completed next year.

 

The 650-hectare site 3.5 kilometres from the Canterbury town of Darfield is being expanded to produce more whole milk powder because Canterbury leads dairy growth nationally.

 

Milk production is increasing by 5-6% a year in the province compared with 2-3% nationally.

 

Fonterra expects the new dryer will just shade the company's largest ED4 powder dryer at the Edendale site in Southland.

 

New Zealand operations director Brent Taylor said the additional stage was a single tower and would use 10 per cent of the site area.

 

Taylor said Canterbury's milk growth was the prime driver for building a second dryer, although it had been in supply talks with West Coast farmers after the Westland Milk Products co-operative indicated it was looking at opening a milk business in Canterbury.

 

The dryer project was a large investment for Darfield and reaction during a community day last month, when 350 people visited the site, had been positive.

 

"We have been open and transparent right from the get go and we indicated there would be more than one stage at Darfield and we are making sure we communicate to people."

 

At this stage, the second dryer is expected to process whole milk powder for delivery mostly to the growth market of Asia, principally China and Southeast Asia.

 

Taylor said there was an expectation that Lyttelton Port would be a vital part of the supply chain and Fonterra was optimistic its operations would be unhindered by earthquakes.

 

Most of the milk powder from Darfield will pass through Lyttelton, with small shipments to go through the ports of Timaru and Port Chalmers for certain destinations.

 

Extracted water from the powder-drying process will be irrigated by centre pivots on farmland surrounding the factory site for grazing and growing silage and other feed crops.