Fonterra invests US$43.12M to expand butter production

NEW ZEALAND – Fonterra has announced a US$43.12 million ($75 million) investment to expand butter production at its Clandeboye site in South Canterbury, as part of the next phase of strategic investments by the Co-operative signalled in its FY25 Annual Results. 

CEO Miles Hurrell says the Co-operative plans to invest up to US$575 million ($1 billion) over the next three to four years in projects that will generate further value for farmers and drive operational cost efficiencies.

“We’ve said that through focused execution of strategy we are targeting our earnings to be back at FY25 levels by FY28 if the Mainland Group business is divested. 

“This investment supports that goal by increasing our production of a high-value product and improving our product mix by adding value to milkfat,” said Mr Hurrell. 

The new butter line will expand the Co-operative’s capacity to produce a range of butter formats, tailored for both global ingredients customers and professional kitchens.

The plant will be capable of producing products that meet diverse market requirements, including Halal and Kosher certifications, supporting our growth in key international markets.

Mr Hurrell says global demand for butter continues to grow, and this investment positions Fonterra to serve customers better worldwide.

Fonterra Chief Operating Officer Anna Palairet says the expansion of the Clandeboye site strengthens Fonterra’s network in the South Island by improving flexibility and resilience. 

“This investment is part of Fonterra’s broader strategic asset roadmap supporting long-term growth in high-value dairy categories. The expansion will create 16 new jobs at the site, supporting the local economy,” says Ms Palairet. 

Construction at the Clandeboye site starts in December 2025, with commissioning scheduled for early 2027 and first product expected off the line in April 2027.

About lactic and unsalted butters:

Traditional churned lactic butter is a European-style product made using a high-speed conventional hand-churning version.

Known for its rich, tangy flavour and dense, creamery texture, lactic butter is ideal for premium applications.

Popular in Middle Eastern cuisine as well as western and local bakery products, Fonterra sells lactic butter direct to customers under its Ingredients brand, NZMP.

The unsalted butter produced at the Clandeboye site will be used for both Ingredients and Foodservice customers.

Unsalted butter is a popular choice in products such as croissants, danishes, bread, cakes and cookies, and is increasingly used in traditional Chinese pastries.

Fonterra sells unsalted butter direct to customers under its Ingredients brand, NZMP, and Foodservice brand, Anchor Food Professionals.

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