Fonterra said it was looking to expand its milk processing capacity in the lower North Island by building a new milk powder plant at its Pahiatua site.
Fonterra, which last week officially opened a new $500 million factory at Darfield, near Christchurch, said it will apply for consents to build a new high-efficiency milk powder plant at Pahiatua, in northern Wairarapa, to process an additional 2.5 million litres of milk a day.
Fonterra's director of New Zealand operations, Brent Taylor said the proposal for a third drier would help ease peak processing pressure in the lower North Island.
"Our two existing driers at Pahiatua are already running at capacity, processing 1.4 million litres a day, and for the past 12 years we've had to send at least 1.6 million litres a day by rail to our site at Whareroa to process," he said.
Taylor said most of the growth in dairy is coming from the South Island but there was still some growth in the North Island.