Fonterra pushes ahead in Australia

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Fonterra's $127 million three-year capital works programme in Australia has rolled forward another stage with a big increase in production capacity for cheese and dairy ingredients in Tasmania.

The New Zealand dairy giant says it has finished $14.6m four-stage project at its manufacturing sites at Spreyton and Wynard, which would result in a significant lift in exports from Tasmania.

Managing director Bruce Donnison says the Tasmanian dairy industry has grown by around 100 million litres of production in the past six years. Fonterra expects milk flows to keep rising so has to be ready to process large volumes efficiently and support farmers' expansion plans, he says.

The projects included expanding cheese production capacity and building a co-generation plant at Wynyard and expanding lactose powder production capacity at Spreyton.

The co-generation plant would enable the Wynyard site to use natural gas to generate its own electricity, helping the plant become more self-sufficient and taking the pressure off Tasmania's electricity distribution infrastructure, Dennison says.

Other stages of the big capital works programme include a water saving project at Fonterra's Dennington plant in Victoria, changes to the Victoria Echuca plant to manufacture Nestle Ski yoghurt for which the company has acquired the licence, and marketing.

- BusinessDesk