Fonterra is upping its production of UHT milk in New Zealand by 30 per cent after an $8m expansion and upgrade of its Takanini processing plant in Auckland.

Takanini plant will now produce an extra 600,000 packs of Ultra Heat Treated milk a week, bringing total annual production to 90 million litres.

Fonterra Brands New Zealand Managing Director Peter McClure says global consumption of UHT is increasing rapidly.

“Global consumption of UHT is expected to grow at a compound annual rate of 5.2 per cent between now and 2012, making it one of the fastest growing dairy categories and a huge export opportunity for us.

“With this increased production capacity, we will be able to expand our presence in our existing markets of China, Singapore and Hong Kong as well as start exporting in to new markets such as Malaysia, Indonesia and Vietnam.

“When we began making UHT in 1981, we were producing just 5 million litres a year. Increasing demand from Asia and the Pacific saw us more than double our production from 27 million litres in 2005 to 60 million litres last year."

Peter McClure says UHT is ideally suited for export to tropical, dairy-hungry Asian markets.

“Limited domestic dairy supply in Asian countries, growing populations and education about dairy’s nutritional benefits are creating this demand.

“UHT does not need refrigeration and it has a nine month shelf life, making it perfect for export to countries with hot climates. It is the only fresh milk and cream product that can be shipped to our customers and stored in the cupboard by consumers.”

The expansion will bring Fonterra’s weekly UHT output to 1.7 million retail packs per week.