Fonterra plans $32m cheese slice plant boost

Last updated 06:19 20/02/2014
Fonterra's slice-on-slice cheese during production at Eltham.
SLICE OF THE ACTION: Fonterra's slice-on-slice cheese during production at Eltham.

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A multimillion-dollar expansion of Fonterra's cheese factory in Taranaki will help the dairy giant keep up with global demand.

The $32 million expansion of its slice-on-slice cheese operation in Eltham would deliver "increased capacity and improved processes to meet global demand," Fonterra director of food service Rene Dedoncker said.

"This investment in slice-on-slice cheese is in response to fast-growing demand throughout Australasia, Asia and the Middle East.

"Our food service business has grown 9 per cent in volume over the past three years and the profitability of food service has increased 11 per cent in the same period."

"Slice-on-slice" cheese is used in products like hamburgers and sandwiches.

The move has been welcomed by Whanganui MP Chester Borrows.

"With 550 people working at the Eltham cheese plant, it's a vital part of the region's economy," Borrows said.

"It's fantastic that Fonterra has the confidence in the future of the Eltham plant to make such a large investment in it. A workplace like this isn't just a collection of pipes and machines - it's a community of people whose diligence and attitude can make all the difference between success and failure."

Borrows said it was the "perfect example" of when a "Government gets its economic settings right."

"What starts as responsible spending, growth-friendly policies and free trade deals at the New Zealand level turns into spending in our South Taranaki communities, and dollars in the pockets of our South Taranaki farmers."

Eltham operations manager Allan Muggeridge said no extra jobs would be created.

"Once complete, the expanded site will be operated by the existing resources at the site," he said.

Construction to expand the plant's cheese processing lines is expected to start early next year.

The announcement comes as construction of a $30 million dry distribution centre at Fonterra's Whareroa site begins to take shape.

That expansion was part of a drive to simplify its supply chain and reduce costs.

Construction of that site is expected to be completed by August this year.

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