Dairy giant Fonterra will invest $100 million into its Australian business to keep a hold on domestic supply.
The global producer will keep investing in Australian products despite a global decline in dairy trade by 9 per cent in July.
Managing director of Fonterra Australia, Judith Swales, says current volatility in dairy won’t stop expansion.
“The demand is solid if you look at the changing behaviour of people in emerging countries.
«But you’re also getting mums going back to work, so they now want infant formula and you’re also seeing a shift to a more western diet and that’s obviously is a great opportunity for dairy.»
Ms Swales says the company is still buoyed by strong demand and predicts a supply deficit for dairy in the future.
“While prices go up and down, I think the one thing that we are very clear about is that the demand for dairy is growing globally.
“If you have growing demand, then that will support growing supply.”
Current expansion is based on the company’s ability to maximise supply volumes coming out of Australia and targeting a western-orientated Asian market.
“We bought Tamar Valley Dairy (in Tasmania) which is looking at that single serve pouch yoghurt space.
”We’ve invested $6 million in our ricotta facility in Stanhope (in Victoria).
“As a progressive dairy business, we want to be always looking at how we stay up with those changes.”
The company’s goal will be to continue to feed supply despite the current downturn in global trade.
Ms Swales says the current climate should not be taken as a sign of weakness and that farmers will continue to see the rewards of turning over high volumes.
“We’ve been listening to lots and lots of farmers the last few days and they all seem to be feeling a lot more confident.
«That’s not to say they are all buying Ferraris, but they are starting to look at their debt structure and invest, repair and maintain their farms.
“They are setting themselves up well for the future.”
Source: ABC
