Fonterra said it will be investing more than NZ$100 million in a new UHT milk processing plant at its Waitoa site in the Waikato.

Fonterra boss Theo Spierings said the new plant would enable them to meet growing Asian demand for UHT products.

"The new plant will enable us to increase our UHT production by 100 per cent over the next few years."

The plant will include five new UHT lines that will produce a range of products including UHT white milk and UHT cream for the foodservice sector.

"Products from the new plant will be bound for Asia markets and that will allow us to concentrate all our domestic UHT production – including Fonterra Milk for Schools – at Takanini in Auckland, Spierings said.

Fonterra said together with the construction opportunities and the creation of an additional 50 jobs, the development would provide new opportunities for farmers in the North Island.

“Milk supply in New Zealand is seasonal because it follows the grass growth curve. However UHT production requires year round milk supply so we will be talking to our farmers about the opportunity for more of them to take up winter milk contracts. This will enable them to take advantage of the milk price premium that these contracts include."

“A recent survey of our farmers indicated that a good proportion of them in the Upper North Island would be keen to take up winter milk contracts,” Spierings said.

The requirements of the new plant will require a 50% rise in winter milk production in the region. Presently, the region is in the grip of a severe summer dry spell.