Fonterra has announced a NZD 75 million investment to expand butter production at its Clandeboye site in South Canterbury.
This is part of the next phase of strategic investments by the Co-operative, signalled in its FY25 Annual Results.
CEO Miles Hurrell said the Co-operative plans to invest up to NZD one 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," said Hurrell.
“This investment supports that goal by increasing our production of a high-value product and improving our product mix by adding value to milkfat.”
The investment will enable the construction of a new butter line at Clandeboye, expanding the site’s current butter production capacity by up to 50,000 MT per annum.
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.
Hurrell said global demand for butter has continued to grow, and this investment positions Fonterra to serve customers better worldwide.
Fonterra Chief Operating Officer Anna Palairet said 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,” said Palairet.
Construction at the Clandeboye site starts in December 2025, with commissioning scheduled for early 2027 and the first product expected off the line in April 2027.
This is Fonterra’s third investment in the South Island in the past year, following:
- NZD 75 million investment in an advanced protein hub at Studholme to be sold through the Ingredients business, catering to the fast-growing high protein market for medical and sports nutrition. Construction is expected to be complete in early 2026.
- NZD 150 million investment in a new UHT cream plant at Edendale to unlock additional capacity for high-value products sold through the Foodservice business. Construction is expected to be complete in the second half of 2026.
Fonterra has recently invested NZD 64 million at Clandeboye to convert two coal boilers to wood pellets, a crucial step in
