Miles Hurrell: Fonterra chief executive on the company's new Southland plant

Fonterra is set to invest $150 million to build a new plant at its Edendale site in Southland to meet growing demand from Asia.

The plant will produce UHT cream - a product that expected to experience growing demand over the next decade.

Fonterra CEO Miles Hurrell says this venture will open up at least 70 new jobs in the area.

"We've got a strong pipeline of people coming through right across the country."

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Episode Transcript

Speaker 1 (00:00):
Now, Fonterra is set to invest one hundred and fifty
million bucks to build a new plant in Southland to
meet growing demand from Asia. The plant will produce uht cream,
with demand expected to rise more than four percent every
single year for the next decade. The chief executive, Miles Hurrell,
made the announcement in Malaysia today. He's traveling with the
Prime Minister's delegation as have A Jatam High Miles, Hi,

(00:20):
this is fantastic stuff. Why do they like the UHTA
cream so much?

Speaker 2 (00:24):
Yeah, I mean it's been a growing market for us
for quite some time, mainly on the back of China
for the last a decade or so. But you know,
we're reaching to a point where our capacity and the
waycados are are filling up and so we need to
invest more.

Speaker 3 (00:35):
So South it's the right thing for us. Yeah.

Speaker 1 (00:37):
And so what's going on here? Because I heard that
apparently people in Southeast Asia are taking the coconut milk
out and putting dairyen. Is that what's up?

Speaker 2 (00:43):
Yeah, there has been a move more from the Western
diet when we've been using our products in the Western
diet more to sort of in that call of fusion,
so you know, such as laxa and milk teas. We're
starting to see our products going to those categories now,
which is great because of course it's what the traditional
people in Malaysia and the like are eating, So it

(01:04):
opens up a new market for us.

Speaker 1 (01:06):
Is there as much demand in places like that as
there is in China?

Speaker 3 (01:10):
I mean it's off a lower base clearly.

Speaker 2 (01:12):
I mean the China story has been going going as
a safe sort of five to ten years now, so
it is growing.

Speaker 3 (01:18):
That's sort of double digit in some in some categories
for us.

Speaker 2 (01:21):
So we are to see and being in Malaysia this week,
you know, to see at first ham and hear from
our customers and partners.

Speaker 3 (01:26):
You know, it's a great market for us.

Speaker 1 (01:28):
And is this a case of you guys hunting out
alternative markets in order to diversify away from China or
are they hunting you out?

Speaker 2 (01:35):
Well, it's a combination of both. I mean we've always
been in the Southeast Asia market, you know, sort of
for fifty odd years in Malaysia, and you know, it's
it's just an opportunity for us to sort of grow
beyond the China's market.

Speaker 3 (01:48):
So you know, it's an end story for us.

Speaker 1 (01:50):
Yeah, it's good, a good move. Okay, So why Edendale.

Speaker 2 (01:54):
Well, there's a blu of surplus cream in that in
that area. You know, most of our cream capacity in
the north is field that white. So this is an
opportunity to sort of turn what maybe you perceived as
a sort of a commodity end of the cycle for
some of the cream that we had down there and
put it into this area. And of course, you know,
opening up to seventy year old new jobs in the
area well received as well. I'm sure by that by
the region.

Speaker 1 (02:14):
Oh, i'd imagine. So yeah, any concerns at all about
actually finding the workforce.

Speaker 3 (02:19):
No, I don't think so.

Speaker 2 (02:20):
I mean, we've got pretty strong relationships with the unions
and as a result it get you know, some pretty
good talent comes through through the pipeline, So I know
we're not concerned about that.

Speaker 3 (02:29):
You know, we've got a strong pipeline of people coming
through right across the.

Speaker 1 (02:32):
Country and miles. You know, you're doing this at a
time when we are talking about so many businesses just
being unable to cope with the power prices and it
being part of the reason why they're talking about shutting down.
Is that a concern for you at all.

Speaker 2 (02:46):
Well, if anything, it sort of reinforces the need to
continue to add value because on one side, you know,
your costs continue to go up and you're under pressure,
so you've got to look for new markets and new
avenues to grow grow the top line. So you know,
if anything, it sort of pushes and to that space.
But we are conscious that you know, the New Zealand
and the world is not in a great space right now.
But you know there's confidence for us and in both

(03:07):
the New Zealand market and in globally. And you know,
couple this with our announcement last week and start them
around our ingredients business. You know, it shows that the
industry is in good shape. And and Fonterra it was
also a good joke. Yeah.

Speaker 1 (03:20):
Do you think the Power thing is going to resolve itself?

Speaker 2 (03:24):
I think so these things over time have habit of
is working themselves out. The markets will sort of, you know,
get back to an equilibrium. But but there's a bit of
pain on the way through, as we can all see.
And it's you know, at least it's it's front and
center now with those and Power and Wellington so hopefully
they can they can see some change coming through, but
but you know it's a stress for the industry.

Speaker 3 (03:43):
No question.

Speaker 1 (03:44):
Miles. How's the trip going?

Speaker 2 (03:46):
You're going well, you know, the Prime Minister has been
out there sort of wave in the new New Zealand flag.
You know, we're here with with other food and beverage companies.
There's education, there's tourism, and he's doing a good job
on that front. But it's been pretty pretty busy. The
last couple off to South Korea later tonight, so looking
forward to that.

Speaker 1 (04:03):
You've got to enjoy yourself. Miles really appreciated this. Miles Hurral,
chief executive of fond Eira, How good is that news
for Edendaligan. I love it. For more from Heather Duplessy
Allen Drive, listen live to news Talks the'd be from
four pm weekdays, or follow the podcast on iHeartRadio.