Ann: GENERAL: FCG: Fonterra invests $555m to meet global dairy...

• Release Date: 27/08/14 13:02
• Summary: GENERAL: FCG: Fonterra invests $555m to meet global dairy demand
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					FCG
27/08/2014 13:02
GENERAL

REL: 1302 HRS Fonterra Co-operative Group Limited

GENERAL: FCG: Fonterra invests $555m to meet global dairy demand

FONTERRA INCREASES PROCESSING CAPACITY TO HELP MEET GLOBAL DEMAND

Fonterra's Board has given the green light to build a new high efficiency
milk powder drier in the North Island and further increase milk processing
capacity in the South Island to help meet global demand for dairy products.

Fonterra's CEO Theo Spierings said this investment, totalling $555 million,
will not only grow the Co-operative's processing capability but allow for
more flexibility to better optimise production.

"Our strategy is to increase earnings by driving more milk volume into higher
value categories globally by turning the wheel from commodities to
higher-margin products," he said.
"By creating more options for our New Zealand operations we are better placed
to be able to make the product mix that delivers the greatest returns to our
farmers and meet the needs of our consumers and customers worldwide."

Approval has been given to build a drier at the Lichfield site in South
Waikato:
- Capable of processing up to 4.4 million litres per day
- Similar in size to the world's largest drier at Darfield which produces up
to 30 metric tonnes of Whole Milk Powder per hour, and 700 metric tonnes per
day
- Will use the latest energy-efficient processing and water reuse technology.

Three plants will also be installed at the Edendale site in Southland:
- Milk Protein Concentrate (MPC) plant which separates protein from skim milk
and turns it into protein powder - capable of processing 1.1 million litres
per day
- Reverse Osmosis (RO) plant which will increase capacity on an existing
drier by 300,000 litres per day
- Anhydrous Milk Fat (AMF) plant capable of processing 550,000 litres of milk
into cream per day.

Fonterra Managing Director of Global Operations Robert Spurway said the
Co-operative has invested more than $1.8 billion to grow processing capacity
since 2011.

"We are investing ahead of the milk growth curve to give us the flexibility
to take advantage of relative market prices, including during the peak
season. It will also accommodate growth from existing farmers and new volume
from joining farmers," he said.

"We have to ensure we have the right balance with having the capacity to cope
with additional milk produced during the peak of the season, while making
sure we avoid having millions of dollars' worth of infrastructure standing
idle in our quieter months."

Mr Spurway said Waikato and Southland are important regions for Fonterra and
both investments will mean more employment opportunities for the local
communities.

"There will be 50 full-time jobs at Lichfield once the drier is complete and
25 more roles will be created once the plants are finished at Edendale.
That's on top of the hundreds of builders, labourers and others who will be
working during the construction phase."
- ENDS -

For further information contact:
Anika Forsman
Phone: +64 21 565 176

Fonterra Communications
Phone: +64 21 507 072

About Fonterra
Fonterra is a global leader in dairy nutrition - the preferred supplier of
dairy ingredients to many of the world's leading food companies. Fonterra is
also a market leader with our own consumer dairy brands in Australia/New
Zealand, Asia/Africa, Middle East and Latin America.

The farmer-owned New Zealand co-operative 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. Drawing on generations of dairy expertise, Fonterra is one of the
largest investors in dairy based research and innovation in the world. Our
more than 16,000 staff work across the dairy spectrum from advising farmers
on sustainable farming and milk production, to ensuring we live up to
exacting quality standards and delivering every day on our customer promise
in more than 100 markets around the world.
End CA:00254481 For:FCG    Type:GENERAL    Time:2014-08-27 13:02:01