"This means we can be more agile in meeting product trends and changes in customer demand -- turning more milk into products that will bring the greatest returns for our farmers."
Mr Spurway said the new dryer is part of the company's strategy for greater efficiency and value in its product mix and co-incidentally the price for Fonterra's products rose almost 15 per cent in this week's Global Dairy Trade auction, with wholemilk powder up 19.1 per cent.
"Dryers like this are already among the most efficient in the world by design," Mr Spurway said.
"We've seen with similar dryers -- like the one at our Darfield site -- that with our systems, processes and people in place we're able to reduce our cost of processing and increase our product yields even further."
The new dryer, P3, is the the third on-site at Pahiatua and has the capacity to process an additional 2.4 million litres of milk each day. Fonterra Pahiatua operations manager Bill Boakes said the new plant would also deliver on Fonterra's commitment to environmental sustainability.
"The plant is the first in New Zealand to reuse its own condensate, significantly reducing the amount of water needed to process each litre of milk. On top of this, the new gas-fired boiler has a number of systems for heat recovery that will drastically improve our energy efficiency.
"To ensure we're able to meet our commitment to sustainable best practice, we've also added a new wastewater treatment plant to handle the additional volumes the site will generate."
The new dryer building is unique in New Zealand as it is the first to have base isolation technology which allows it to withstand a one-in-2500-year earthquake.
The new P3 plant is expected to be running at full capacity by early October.
