Fonterra expands UHT to meet export growth in Asia

Fonterra Brands New Zealand will be filling an additional 600,000 packs of ultra heat treated (UHT) milk every week after completing an $8 million expansion and upgrade of its UHT milk processing plant in Takanini, Auckland.

MD Peter McClure said the company is seizing the opportunity to increase its footprint in global markets, particularly in Asia and the Pacific, by investing in a 30% increase in production capacity.

“Global consumption of UHT is expected to grow at a compound annual rate of 5.2% between now and 2012, making it one of the fastest growing dairy categories and a huge export opportunity for us.”

“With this increased production capacity, we will be able to expand our presence in our existing markets of China, Singapore and Hong Kong as well as start exporting in to new markets such as Malaysia, Indonesia and Vietnam.

“When we began making UHT in 1981, we were producing just 5 million liters a year. Increasing demand from Asia and the Pacific saw us more than double our production from 27 million liters in 2005 to 60 million liters last year. With this expansion, we will have an annual production of 90 million liters, that’s more than 1.7 million one liter retail packs of UHT a week.”

“Limited domestic dairy supply in Asian countries, growing populations and education about dairy’s nutritional benefits are creating this demand.

“UHT does not need refrigeration and it has a nine month shelf life, making it perfect for export to countries with hot climates. It is the only fresh milk and cream product that can be shipped to our customers and stored in the cupboard by consumers.”

Fonterra Brands New Zealand is looking to innovate with UHT and develop new products to add to its range, such as low fat and vitamin enriched milks.

The company will also add two new products to its range of UHT creams.

“Global dairy and nutrition trends show consumers are increasingly seeking products that are more convenient and better for you. In 2011, we’ll be adding two new UHT creams to our foodservices range that are easier to whip and more convenient for chefs. We will also be looking to develop low fat and fortified UHT milks as we’re seeing the demand for these products emerging in developing markets.”