Fonterra to spend $27M beefing up capacity at Te Rapa storage facility
July 2 (BusinessDesk) - Fonterra Cooperative Group, the world’s biggest dairy exporter, plans to spend $27 million to double storage capacity at its Te Rapa site, which is currently under-capacity.
The Auckland-based cooperative expects to save an annual $5 million in operating costs from a new dry store at the Waikato site, where its base capacity it at just 60 percent of standard season production in Te Rapa, it said in a statement. The new storage will more than double capacity at Te Rapa, meaning the local product can be stored in Waikato before being sent directly to a port for export.
“The new dry store will enable us to store more product at the site of manufacture right through the peak of the season and to more efficiently manage the flow of goods through to our customers by better utilising the rail infrastructure out of our Crawford St distribution centre,” Fonterra director logistics network Mark Leslie said.
The investment comes after a similar announcement last month to boost storage at Fonterra’s Taranaki dry distribution centre.
Fonterra is on a savings drive to strip out up to $65 million a year by eliminating 300 jobs, centralising services, cutting duplication and simplifying management structures.
Units in the Fonterra Shareholders’ Fund increased 0.3 percent to $7.28.