Fonterra has announced a $75 million investment to expand butter production at its Clandeboye site in South Canterbury, as part of the next phase of strategic investments outlined in its FY25 annual results.
Chief executive officer Miles Hurrell said the company plans to invest up to $1 billion over the next three to four years in projects designed to generate further value for farmers and improve operational efficiency.
“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 fund the construction of a new butter line at Clandeboye, expanding the site’s production capacity by up to 50,000 metric tonnes per year. The new facility will allow the company to produce a wider range of butter formats tailored for global ingredient customers and professional kitchens.
The plant will also be capable of producing products that meet market standards, including Halal and Kosher certifications, supporting the company’s export growth.
“This investment is part of Fonterra’s broader strategic asset roadmap supporting long-term growth in high-value dairy categories,” said Fonterra’s chief operating officer Anna Palairet.
“The expansion will create 16 new jobs at the site, supporting the local economy.”
Construction at Clandeboye is scheduled to begin in December 2025, with commissioning planned for early 2027 and first production expected in April 2027.
This will be Fonterra’s third investment in the South Island within a year, following:
- A $75 million investment in an advanced protein hub at Studholme for its ingredients business, catering to the growing high-protein market for medical and sports nutrition. Construction is expected to finish in early 2026.
- A $150 million investment in a new UHT cream plant at Edendale to increase capacity for high-value products sold through its foodservice business. Construction is due to be completed in the second half of 2026.
Fonterra has also invested $64 million at Clandeboye to convert two coal boilers to wood pellets, as part of its commitment to phase out coal by 2037. The conversion was completed in August 2025.