Fonterra invests NZ$75m for new butter line at Clandeboye

Fonterra Co-operative Group has announced an NZ$75 million investment to expand butter production at its Clandeboye site in South Canterbury.

The investment will enable construction of a new butter line at Clandeboye, expanding the site’s current butter production capacity by up to 50,000 MT per annum.

CEO Miles Hurrell said the investment will be used to increase the production of a high-value product and improve the product mix by adding value to milkfat.

The new butter line will be designed to help expand the co-op’s capacity to produce a range of butter formats, tailored for both global ingredients customers and professional kitchens.

The plant will be capable of producing products that meet diverse market requirements, including Halal and Kosher certifications.

Fonterra Chief Operating Officer Anna Palairet said: “This investment is part of Fonterra’s broader strategic asset roadmap supporting long-term growth in high-value dairy categories. The expansion will create 16 new jobs at the site, supporting the local economy.”

Construction at the Clandeboye site starts in December 2025, with commissioning scheduled for early 2027 and first product expected off the line in April 2027.

This is Fonterra’s third investment in the South Island in the past year, following:

• NZ$75 million investment in an advanced protein hub at Studholme to be sold through its Ingredients business — construction is expected to be complete in early 2026.
• NZ$150 million investment in a new UHT cream plant at Edendale to unlock additional capacity for high value product sold through its Foodservice business — construction is expected to be complete in the second half of 2026.
• NZ$64 million at Clandeboye for the conversion of two coal boilers to wood pellets, to meet Fonterra’s commitment to exit coal by 2037 — the conversion was completed in August 2025.

Image credit: iStock.com/MariaBrzostowska