What Would Synlait Be Worth to Fonterra or a2 Milk?
Speculation of a possible joint move by Fonterra and a2 Milk to buy Synlait raises a much bigger strategic question, says agribusiness expert Dr Nic Lees.
The co-operative's foodservice channel registered a $27 million increase in operating profit for FY25 as demand continued to grow for UHT cream, butter and individually quick frozen (IQF) mozzarella.
While China is the main destination for Fonterra's foodservice products, demand is growing in Southeast Asia where restaurant chains and cafes are using more dairy in their dishes.
Jack Tan, the co-op's acting director of Southeast Asia Foodservice, says the growth reflects a broader shift in how dairy is embraced across the region.
"We're seeing strong and sustained growth in demand for UHT cream across Southeast Asia Anchor Whipping Cream is becoming a staple in many local favourites, from beverages to baked goods."
Across Southeast Asia, Fonterra's dairy products are being infused into local favourites by adapting to regional tastes and food culture. Fonterra's Anchor Whipping Cream is being used in Portuguese egg tarts in Singapore, Malaysia and Thailand. It's also gaining popularity in local beverage applications across Malaysia, Singapore, Indonesia, and Vietnam - where it's even being added to Vietnamese coffee for a creamy twist.
The $150 million investment in the Edendale UHT plant is coming along well, with the first products expected to roll off the line in August 2026.
Read More:
- Fonterra investing $70m in new electrode boilers
- New UHT plant construction starts
- Fonterra announces new $150m UHT plant for Edendale site
Andrew Johns, Fonterra's general manager of lower South Island operations, says that the investment at Edendale is not just about meeting demand - it's about building for the future.
"We're really excited about this opportunity to build a new plant here in Southland and supply UHT cream for growing markets."
The plant will initially create capacity to process upwards of 50 million litres of UHT cream annually, with the ability to grow beyond 100 million litres by 2030.
Nine months since construction began in January, the site is clearly visible from State Highway 1. The walls and concrete slabs for processing and packing are in place, and most of the roof is now on. Work on the product store is progressing well, and construction of the distribution warehouse is underway. External excavation is nearly complete and foundations for the container yard are advancing steadily.
"We're making sure we deliver a safe plant that can produce high-quality product that exceeds customer expectations."
Currently, more than 50 peole are working on the build, with that number expected to grow to around 150 in the coming months as activity ramps up.
"There's good energy on site and I hope that's filtering thro
