A new $212 million milk dryer commissioned this week makes the Edendale dairy factory the biggest raw milk processing plant in the world, according to Fonterra.
The new dryer, called ED4, is the world's largest and most efficient milk dryer, capable of producing 35 shipping containers full of milk powder every day, the co-operative said.
The dryer has the capacity to turn 100 litres of milk into 10 kilograms of milk powder every second, and can produce more than 700 tonnes of milk powder a day.
Fonterra New Zealand manufacturing general manager Brent Taylor told The Southland Times the new dryer highlighted the importance of Edendale and Southland to the co-operative.
"We do have more capacity than actual milk supplies but as cow numbers and farm conversions increase, the capacity will reach a maximum and further expansion will be required."
In 1992 the Edendale plant could handle 600,000 litres a day, which has grown to 15 million litres a day since ED4 was commissioned. Although processing only 7.5 million litres a day this season, it could reach capacity in about three years, Mr Taylor said.
Fonterra believes the Edendale factory had the largest capacity of any plant in the world.
The project was approved in January 2008, with construction starting in June last year.
Up to 550 tradesmen were working on the site at the peak of construction, with half of those Southland contractors.
An extra 40 permanent staff have been employed on the site because of the expansion. The new dryer was needed because milk production forecasts in the South Island, and particularly Southland, showed supply would eventually outstrip processing capacity, Mr Taylor said.
Fonterra's Clandeboye plant, near Temuka, was an option but the Edendale site was chosen because of its reputation and expertise in powder production.
Along with whole, skim and buttermilk powders, the Edendale factory produces about 15,000 tonnes of cheddar cheese for markets in Japan, the Middle East and the Philippines, refined and edible-grade lactose, whey cheese, casein, anhydrous milk fat and whey protein concentrate.
While the new dryer will meet processing requirements for about three years, it appears further expansion is inevitable. The co-operative wants to increase its business by sustainably increasing its milk supply and expanding its processing capacity.
Fonterra Edendale hub manager Keith Mason said there was plenty of sheepland in Southland and Otago that could be converted to dairy to meet demand for dairy products.
Global demand rises on average 3 per cent a year with Asia, the Middle East and Latin America the emerging markets.
Even if there were no extra conversions, milk output would still grow because farmers were increasing production through herd and pasture improvements, Mr Mason said.
"There's underlying growth that will come through regardless of conversions."
While the conversion rate had slowed during the past two years, the increasing demand for dairy products, Fonterra's forecast payout increase announcement this week, an improving global situation and low interest rates could fuel another round of change, Mr Mason said.
- © Fairfax NZ News
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