Fonterra to close milk powder packaging facility in New Zealand

Fonterra will shut its Canpac packaging facility in New Zealand in July, impacting approximately 120 employees. The site primarily blends and packages milk powders. 

Its closure forms part of Fonterra’s plan to divest its consumer business, which includes brands such as Anchor, Anlene, Chesdale, and Mainland.

The consumer division accounts for about A$3.1 billion (NZ$3.4 billion) of the group’s invested capital.

Canpac currently packs up to 4,000 mt of powder products annually, equivalent to less than 1 percent of Fonterra’s total product volume.

COO Anna Palairet said the move follows ongoing economic challenges, including low product volumes and increased production complexities.

“It’s been a tough day for all the team at the site,” she expressed. “Making decisions like this is never easy.”

Palairet explained that the company will pivot towards higher-value ingredients, such as advanced proteins and medical nutrition.

“Our strategy is about creating end-to-end value and growing total returns for our farmer shareholders,” she continued.

“We believe the best way to achieve this is to focus on our strengths and scale in ingredients and food service, and we are prioritising our investment on the parts of our operations that are better suited to this.”

The dairy cooperative will begin a consultation process to explore potential redeployment opportunities for affected staff as it winds down operations.