Fonterra Australia to invest $93.6m in building a cheese plant at Stanhope factory

Fonterra Australia will invest NZD141m ($93.6m) in building a cheese plant at its Stanhope factory to replace the hard cheese plant that was destroyed by fire in December 2014.

The new cheese facility will be a larger, and more advanced than the earlier facility, and will produce cheeses for foodservices and export markets, and Australian consumers.

Construction of the new plant will commence by 2016, and is slated to be completed by 2017.

The project will create up to 30 jobs and is being supported by the Victorian Government through its Regional Jobs and Infrastructure Fund.

Fonterra Oceania managing director Judith Swales said that investment in the new plant will help the firm to deliver on its multi-hub strategy to draw maximum value and drive increased returns.

"Today’s announcement is strategy in action, where we are delivering on our strategic plan to transform our Australian business and return it to strong and sustainable profitability.

"We are focusing on areas where we can win in a highly competitive market, and that means optimising our product mix and investing in higher value add products that will deliver the best returns for our farmer shareholders. Rebuilding and expanding our Stanhope cheese plant is key to this. "

The new facility will be able to produce 45,000t of cheese annually, including parmesan, gouda and mozzarella, an increase in capacity by 15,000t.

Swales added: "As the branded market leader in the A$1.95 billion retail cheese category, with Bega, Mainland and Perfect Italiano commanding a 23% market share, the new plant will supply our Australian consumer and foodservice businesses, and export markets.

"It will leverage our footprint in 100 markets and also the recent free trade agreements with China, Japan, and Korea. The new cheese plant is an important part of our multi-hub strategy, which sees our Australian business play to its ingredients strengths in cheese, whey and nutritionals complemented by our consumer and foodservice businesses.

"The new cheese facility will offer whey to its Darnum and Dennington plants.

"Importantly, the new plant will require significant growth of the local milk pool by 2020, and demonstrates Fonterra’s commitment to growing the industry long-term. It means our local farmers can be assured of the future of dairy in northern Victoria," noted Swales.

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Image: From left to right – Fonterra director of marketing Kiril Simonovski, Australian Dairy Farmers CEO Ben Stapley, Fonterra director of operations and supply chain Stuart Martin, Bonlac Supply Company chairman Tony Marwood, Minister for Agriculture Jaala Pulford, Shire of Campaspe CEO Jason Russell, Shire of Campaspe Mayor Leigh Wilson. Photo: Courtesy of Fonterra Co-operative Group.