Goodman Fielder [NZX: GFF], the Australian food ingredients maker, will spend $27 million to expand its Christchurch ultra heat treated milk plant, giving it additional capacity to meet increased demand for its Meadow Fresh brand in Asia.
Work to extend the existing UHT building and install a new pasteurising, sterilising and palletising line as well as a new 250ml high-speed filler is expected to be completed by October 2015 and will boost production at the site by 50 percent, enabling it to process an extra 32 million litres a year, Sydney-based Goodman Fielder said in a statement.
Increased demand for milk powder from China, driven by an expanding and wealthier population that is embracing western foods, has pushed dairy cooperative payouts to farmers to a record high and underpinned the conversion of traditional pastoral farms to dairying. Higher payouts are enticing farmers to increase milk production, and dairy factories are having to step up production capacity to cope with the surge.
"The premium UHT category in Asia Pacific is anticipated to grow by around 50 percent over the next five years," Goodman Fielder chief executive Chris Delaney said. "We are investing now to meet that demand and also plan for future growth."
Construction of the new building and production line will require 40 full-time equivalent roles for the 8-month construction period and the increased production will also require 12 new roles, the company said.
Shares in Goodman Fielder last traded at 74 cents and have gained 2.8 percent so far this year.
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