$32m food service expansion at Eltham

Slice-on-slice cheese is used extensively in quick service restaurants for products such as hamburgers and sandwiches. Work will start in early 2014 with expected completion by mid-2015. The expanded plant will deliver both increased capacity and improved processes to meet growth in global demand from Fonterra's foodservice customers.

Fonterra director of foodservice, René Dedoncker, says the investment demonstrates the co-operative's drive to grow its business in the high-value foodservice industry.

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

"We also achieved double digit growth in China where foodservice grew 28%.

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

International growth in cheese is being driven by trends in eating out of home, particularly in emerging Asian economies where there is a continued shift toward more westernised diets.

Dedoncker says driving its foodservice business is one of Fonterra's seven strategic pathways and the cooperative had set itself ambitious growth targets over the next five years.

The foodservice category includes full and quick service restaurants, bakeries, cafes, hotels, airline catering facilities and other commercial kitchens.