A farmgate milk price at the upper end of Fonterra’s forecast is now on the cards.
And to meet increased demand in China it is installing more production lines at its New Zealand plants.
The co-op says it has 50-80% market share in most foodservice categories in China. To grow sales it launched Anchor Food Professionals -- foodservice specialists working with chefs and drawing consumers into their bakeries, pizzerias, restaurants or coffee shops.
Now in 76 cities, Anchor Food Professionals aims to grow this presence to 160 cities in five years.
A lot of cream in China has traditionally been made from non-dairy products such as canola. The teams working there in foodservice kitchens are showing customers the difference dairy makes to premium foods.
This growth is prompting Fonterra to add to the production capacity of its UHT plant at Waitoa, in Waikato.
It recently completed a new 1L UHT line and began work on a second such line to produce an extra 45 million litres annually for the Asia, Middle East and Caribbean markets.
The $35 million expansion will enable the Waitoa plant to add 120 million cream packs and 26 jobs in the region.
Fonterra chief operating officer global operations Robert Spurway says decisions on these expansions are based on demand.
“It reflects the work our foodservice team is doing in the markets, and our teams at our sites, to support one of the fastest growing and highest returning parts of the business.”
Spurway says the Waitoa expension is good for the region.