Fonterra to close Hamilton milk powder facility, impacting 120 jobs

NEW ZEALAND – Fonterra, the world’s largest dairy exporter, announced plans to shut down its Canpac milk powder packaging facility in Hamilton by July 31, 2025, putting approximately 120 jobs at risk. 

The decision aligns with the company’s strategic shift toward high-value ingredients and foodservice sectors, as it prepares to divest its consumer business.

The Canpac facility, known for blending and packaging milk powders, has faced challenging economic conditions due to low product volumes and increasing production complexities.

According to Fonterra’s Chief Operating Officer Anna Palairet, the facility processes less than 1% of the company’s total product volume, approximately 4,000 metric tons annually. 

“Our strategy is about creating end-to-end value and growing returns for our farmer shareholders,” Palairet said. 

“We believe focusing on our strengths in ingredients and foodservice is the best way to achieve this.”

Fonterra’s move comes as part of a broader restructuring effort. 

The company, which employs over 670 people at its Edendale site alone, is prioritizing investments in advanced proteins and medical nutrition. 

The closure follows Fonterra’s decision to progress with the divestment of its consumer business, which includes well-known brands like Anchor, Mainland, and Kāpiti. 

This business, recently rebranded as Mainland Group, is valued at up to $2.9 billion and may be sold through a trade sale or initial public offering.

Local communities and workers are bracing for the impact. The Canpac site, equipped with state-of-the-art blending and canning lines, has been a significant employer in Hamilton.

Fonterra has pledged to support affected employees, with Palairet stating, “We are committed to working closely with our people to explore redeployment opportunities or provide assistance during this transition.” 

The closure has sparked concerns about economic ripple effects in the region, though no specific timeline for redeployment or severance plans was disclosed.

Fonterra’s strategic pivot is driven by market dynamics, including rising global dairy prices and strong demand in regions like China and Southeast Asia. 

The company recently raised its 2025 earnings forecast to between 39 and 54 cents per share and maintained a farmgate milk price of US$7.24 per kilogram of milk solids. 

Despite a first-quarter profit drop due to higher milk costs, Fonterra reported an 8.5% increase in consumer channel sales volumes.

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