Located in one of New Zealand’s largest farming communities, Fonterra’s Te Rapa site is considered one of the company’s backbone manufacturing operations, churning out nearly 20% of all the company’s whole and skim milk powders.

Located in one of New Zealand’s largest farming communities, Fonterra’s Te Rapa site is considered one of the company’s backbone manufacturing operations, churning out nearly 20% of all the company’s whole and skim milk powders. The 12 hectare site was established in 1967 in the Waikato region, 90 minutes south of Auckland.

Over the past 40 years, the Te Rapa factory has become something of a local icon for motorists passing by and people who live in the area. In Maori, the language of New Zealand’s indigenous people, Te Rapa means “the seeking,” an appropriate name for a dairy factory that stands in the middle of an area regarded by many as the heart of New Zealand’s dairy industry.

A number of upgrades and new plant have seen the site’s manufacturing portfolio expand widely since its early days. A milk powder drier with the capacity to handle 22 metric tons per hour was installed in 1998, the biggest of its kind in the world at that time.

From the farm to the world

Fonterra Te Rapa operates 24 hours a day from mid-July through May. The site handles 304 tanker loads of milk each day, which is used to make whole milk powder, skim milk powder, butter, anhydrous milk fat (AMF) and cream cheese for export to countries around the world.

During the busy months of October and November, 7.3 million litres of raw milk from surrounding farms is processed every day. Up to 225,000 tons of milk powder is produced at the site’s milk powder plant every year while the cream plant produces 75,000 tons of cream products annually.

The plants are assisted by technical teams, which provide market technical support, technical servicing and support the commercialisation of new products and customer visits. The teams work with the site’s manufacturing staff and Fonterra’s national innovation team to develop product solutions for the specific requirements of customers.

A sustainable cooperative

Increasing efficiency while driving down operating costs is the challenge for Fonterra’s manufacturing business. It is committed to maintaining the high quality of its dairy products and manufacturing in ways that maximise returns to shareholders while reducing any environmental impacts.

That commitment can be seen in Fonterra’s foundation theme of being a sustainable cooperative. It’s a theme that Fonterra takes seriously, constantly reviewing and improving manufacturing operations to achieve this goal and realise its vision to lead in dairy.

In an effort to minimise Fonterra’s environmental footprint, some eco-friendly targets and initiatives have been put in place at New Zealand sites. One of those initiatives is the carbon account, which was set up at the end of last year to raise awareness of carbon dioxide emissions. In many ways similar to an emissions trading system, the carbon account collects data about each site’s carbon dioxide emissions and places a hypothetical dollar value on them.

Fonterra is also making inroads into the reduction of energy use. Energy is Fonterra’s third highest cost after wages and depreciation, so in 2003 the company set up an energy reduction project that aimed to cut energy consumption by 10%.

The objective was to reach this level by the 2008-2009 season, but the project’s success has seen this brought forward by two years. In the 2005-2006 season, Fonterra saved 1.8 petajoules-enough to power a city with a population of around 150,000-and made up 82% of New Zealand businesses’ total reported energy savings. 

Fonterra has set a New Zealand-wide target of reducing waste from manufacturing sites to landfill by 75% by the end of this year and by 90% by June 2009.

“The quantity of waste we have deposited in landfills over the past two and a half years has already been cut by an average of 60%,” says Gary Romano, dir. group manufacturing and supply chain.

“In the past year, we’ve collected and recycled over 1,000 tons of cardboard and paper that was previously going to waste. In that time, about 400 tons of plastic has also been collected for recycling.”

As one of Fonterra’s largest manufacturing operations, Te Rapa has made a significant contribution to the success of these efforts. For Hub Operations Mgr. Roger Usmar, operating an environmentally sustainable business is key to ensuring the sustainability of the industry.

“We want to be seen an asset to our community and we pride ourselves on our environmental performance,” he explains.

“This site has some of the tightest resource consents of any dairy site in the country and our staff go the extra mile to make sure we minimize our water usage, reduce our energy spend, effectively control our waste disposal and generally do our bit for the environment.”

Usmar says Te Rapa’s eco-efficiency program to reduce the amount of waste going to landfill and an advanced wastewater treatment plant, coupled with staff awareness and focus, all support the site’s commitment to the local community and the environment.

“Our people not only work here, they also live and interact locally. So it’s important that the site and its workforce are seen as positive and important players in the community.”

The pursuit of operational excellence

An Operational Excellence program (OE) is at the forefront of Fonterra’s drive to operate a world-class manufacturing business that is economically and environmentally sustainable.

OE was designed to help Fonterra maintain its lowest cost position by keeping the cost of producing products as lean as possible. Run in partnership with the Dairy Workers’ Union and the Engineering, Printing and Manufacturing Union, the program encourages staff to look at their workplace and find improvements that can be made using best practice tools from the TRACC family.

The program has been up and running across Fonterra’s New Zealand manufacturing sites for more than three years and is already delivering major time and efficiency benefits to the company.

Brent Taylor, general mgr. of New Zealand Manufacturing, says the dedication of resources to staff training and development in OE is resulting in greater job satisfaction. One example of that is the new Diploma of Manufacturing Management, which is currently being sat by 115 of Fonterra’s future OE leaders.

“Together with the unions, we’ve made a joint effort over the past five years to build our own internal capability, creating a more challenging and stimulating working environment, while ensuring the concept of continuous improvement becomes part of what we do every day.”

The success of Te Rapa’s drive for operational excellence was evident in April this year, when its cream products team produced a record production of cream cheese, up 3% from the previous record set last year.

Plant Manager Peter Dewar says the achievement was the result of a combination of initiatives to help meet growing demand for the product, especially in Japan and South-East Asia.

“Our plant upgrade last season in particular has greatly improved our efficiency and allowed our staff to focus less on equipment maintenance and more on strong production results.”

While relatively small in scale, the upgrade has increased the plant’s overall capacity by 20% and improved its first time grading record. 

“Because these results are even better than we initially anticipated, we are setting even more aggressive production targets for next season-a challenge which I’m confident our team can rise to,” says Dewar. n

This article was provided to Dairy Foods courtesy of Fonterra, New Zealand, and Fonterra USA.

Snapshot of Te Rapa

  • Te Rapa – Maori for ‘the seeking’

  • Site built – 1967 (many additions and upgrades since)

  • Milk powder drier commissioned in 1998 was the world’s largest at the time

  • Site size – 12ha

  • Staff – 500

  • Tankers runs each day – 304

  • Peak milk capacity – 8 million litres of raw milk a day

  • Tons of milk powders produced annually – 225,000 (skim and whole milk)

  • Tons of cream products produced annually – 75,000 (butter, anhydrous milkfat and cream cheeses)

    Fonterra - a Young Company with a Long History

    It was the merger of dairy processing companies New Zealand Co-operative Dairy Company and Kiwi Co-operative Dairies, along with the former New Zealand Dairy Board, which saw the formation of Fonterra in 2001. The merger brought together the deep dairy knowledge, innovation and established relationships with global customers that the three companies had built up during a history spanning 200 years in the industry.

    Five years later, Fonterra’s annual sales eclipse $8 billion, and it was named in the top six dairy companies in the world by turnover in the June 2006 Rabobank ratings. The cooperative is now the world’s largest dairy exporter, responsible for a third of international dairy trade. It collects 14 billion litres of milk every year and exports dairy products to customers and consumers in 140 countries.

    Fonterra is owned by more than 10,000 farmer shareholders, employs around 17,000 people around the globe and operates 26 manufacturing sites in New Zealand alone. Other processing operations are located in Australia, Asia, Europe and North and South America. The cooperative is lead by a group of 13 board members and a team of 11 top level executives.

    Consumer brands include Anchor, Mainland and Tip Top, and products are sold on every developed continent in the world.