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Fonterra has announced plans to close its canning and packaging facility, Canpac, located in Hamilton, New Zealand, by the end of July 2025.

This decision aligns with the company's focus on higher-value ingredients, particularly advanced proteins and medical nutrition, as it seeks to enhance returns for its farmer shareholders.

Fonterra’s chief operating officer, Anna Palairet, cited low product volumes and increasing complexities in production as key factors contributing to the economic challenges faced by the Canpac site.

“It’s been a tough day for all the team at the site. Making decisions like this is never easy," Palairet said. "Our strategy is about creating end-to-end value and growing total returns for our farmer shareholders. We believe the best way to achieve this is to focus on our strengths and scale in ingredients and foodservice, and we are prioritising our investment on the parts of our operations that are better suited to this. We are committed to supporting our employees as we work through the next steps.”

The facility, which primarily blends and packages milk powders, has been operating at a reduced capacity, packing approximately 4,000 metric tons of powders annually – less than one percent of Fonterra’s total product volume.

The closure will impact around 120 employees at the site. Fonterra has committed to supporting affected staff through a consultation process, which includes exploring potential redeployment opportunities within the organisation.

This pivot comes as Fonterra continues to invest in its capabilities, with recent announcements highlighting plans for new advanced protein production lines and sustainability initiatives aimed at future-proofing its operations.