Fonterra diverts milk after quake damage

Milk is being diverted from Fonterra's Pahiatua distribution storage centre after it was damaged in yesterday's earthquake.

Fonterra's operations manager Robert Spurway told RadioNZ some cracks appeared in the building and the sprinkler system gave way following the quake that struck shortly before 4pm.

Pahiatua is about 24 kilometres north of Eketahuna.

Milk was being diverted to other plants until it was considered safe to resume operations at the Pahiatua site, Spurway said.

This was a normal procedure and would not affect the wider supply chain, he said.

"We've got all of the milk diverted to other plants so we expect to be able to collect milk with no interruption from collection," he told RNZ.

The plant, which processes 1.4 million litres of milk a day, was relatively small in terms of Fonterra's scale, Spurway said. Fonterra processed more than 85 million litres a day at the peak of the season.

"It's an important facility but absolutely won't cause major disruption even if it's out for more than a few days, and we expect it may be much shorter than that."

Fonterra plans to expand the Pahiatua site during the next 18 months, spending between $200 million and $250m mainly on a new milk powder dryer and storage area so the plant can process milk from the eastern side of the lower North Island, from Hawke's Bay to Wellington.

The proposed expansion will treble milk powder processing, add 45 long-term jobs and employ about 600 during construction.

Spurway said structural engineers were assessing the damage overnight.

"Obviously we like to have all of our plants operational," he said.

"We'll be looking at resuming production as quickly as possible and as soon as it's safe to do so at Pahiatua."

Spurway would not say how the quake damage might affect the expansion until the company had a better idea of the extent of the damage.

There were no reports of injury of Fonterra staff or farmers in the area, he told RNZ, but there had been some property damage.

Fairfax Media