Fonterra will build a $240 million mozzarella plant in South Canterbury, making it the largest producer of natural mozzarella in the Southern Hemisphere.

The new plant, at Fonterra Clandeboye near Temuka, will double Fonterra's ability to produce individually quick frozen (IQF) mozzarella, the company said.

"The world-class innovation behind the IQF mozzarella reduces the processing time from three months to just six hours, and is one of the co-operative's most tightly-kept secrets," Fonterra said in a statement. "The new expansion will capture every cent of value from the milk. New plants will process the whey and lactose created in the cheese making process - both valuable dairy ingredients."

Jacqueline Chow, chief operating officer for global consumer and foodservice, said the company's IQF mozzarella is used on more than half the pizzas in China, and it foresees growth in that market where the use of dairy in foodservice has grown by over 30 percent in five years.


"We see massive growth potential and our teams in the market are continually working to grow this valuable part of the business as we work towards foodservice becoming a $5 billion business by 2023," Chow said. "This new plant will go a long way to helping us achieve this."

Chief operating officer for global operations Robert Spurway said the company had had to focus on capacity rather than increasing its investment in high-value products due to statutory requirements around its acceptance of milk, but strategic investments were key to its strategy.

"We have continued to back ourselves through savvy investment in the right products, the right innovations to differentiate our products, and the right people to engage our global customers and sell them on pure New Zealand dairy," Spurway said.