Fonterra Australia will invest $128 million in building a state-of-the-art cheese plant and will enter into a five-year, multimillion-dollar strategic agreement with food and beverage company Bellamy’s Australia to manufacture a range of new baby nutritional powders.
The cheese facility will be built at Fonterra’s Stanhope factory in Victoria, replacing the hard cheese plant destroyed by fire in December 2014 with a larger, modern facility that will produce cheese for the Australian consumer, foodservice and export markets.
The new facility will be able to produce 45,000 megatonnes of cheese each year – including parmesan, gouda and mozzarella styles – representing an increase of 15,000mt on the previous plant’s capacity.
Construction of the new plant will begin next year and is expected to be completed in 2017.
Fonterra Oceania Managing Director Judith Swales says investing in the new plant will help Fonterra deliver on its multihub strategy to get the maximum value out of every drop of milk and drive increased returns from the business.
“We’re delivering on our strategic plan to transform our Australian business and return it to strong and sustainable profitability,” she said.
“We’re focusing on areas where we can win in a highly competitive market, and that means optimising our product mix and investing in higher-value-add products that will deliver the best returns for our farmer shareholders. Rebuilding and expanding our Stanhope cheese plant is key to this.”
Commenting on Fonterra’s strategic arrangement with the fast-growing Bellamy’s Australia, parent company of infant formula producer Bellamy’s Organic, Ms Swales said: “We’re actively growing our nutritionals business through strategic partnerships and agreements, which will see the Darnum nutritionals plant [in west Gippsland] move towards full capacity.
“Our Australian business has particular ingredients strengths in cheese, whey and nutritionals, complemented by our strong consumer and foodservice businesses, and this announcement with Bellamy’s Australia reaffirms our strength in nutritionals.”
Ms Swales says the proposed strategic agreement will help support the growth of Bellamy’s Organic in Australia and abroad, and builds on the companies’ strong current relationship.
“We’re also nearing the finalisation of the Darnum joint venture with Beingmate Baby and Child Food Company Ltd following the recent formal approval by Beingmate’s board and shareholders,” she said.
Fonterra and Bellamy’s will work to finalise the proposed arrangements by the end of the year, with the agreement beginning in 2016.