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Fonterra has revealed plans to expand its Studholme facility in New Zealand's South Island, aiming to enhance its production capabilities for high-value protein ingredients.

This move is part of the company's broader strategy to strengthen its position in the global dairy market, particularly in the high-protein segment, which is projected to grow by nearly $10 billion over the next four years.

The expansion, which involves an NZD 75 million (approx. $47.13 million) investment, reflects Fonterra's commitment to leveraging its dairy science and innovation expertise.

CEO Miles Hurrell said: “We have valuable expertise in dairy science and innovation, making us leaders in the manufacture of dairy proteins and other advanced ingredient solutions".

He added: "The expansion of our Studholme site will allow us to increase production of this high-value product and ultimately grow returns to farmers”.

Fonterra's proteins are designed for premium applications, including medical and high-protein sports nutrition, and are increasingly sought after by manufacturers worldwide.

Richard Allen, president of global markets ingredients, commented: “We see significant opportunities in the global high protein dairy category, which is projected to grow by close to $10 billion over the next four years, at an annualised growth rate of 7% per annum".

He continued: “Increasing our manufacturing capacity for functional proteins will enable us to continue to strengthen our offerings with existing customers as well as attract new business”.

Construction at the Studholme site is set to commence next month, with the first products anticipated to roll off the production line by 2026.

The facility will continue to support milk processing in the South Island, a role it has maintained since Fonterra acquired the site in 2012.

The decision to expand at Studholme was informed by a comprehensive review of Fonterra’s global asset network.

Allen highlighted the site's suitability for expansion, citing its size, relative newness, and design for future growth. "This project not only makes economic sense but also ensures a long-term supply of high-value ingredients," he said.

The expansion is expected to create six new jobs at the facility, with additional contractors likely sourced from the Canterbury region.

Furthermore, the project aligns with Fonterra's sustainability goals, as it includes the conversion of the existing coal boiler to a coal-free alternative, part of the Co-op’s commitment to eliminate coal use by 2037.