The company would shift milk processing from the small ageing plant at Brightwater to its bigger Darfield site near Christchurch in April next year, said Fonterra chief operating officer Fraser Whineray.

Milk collection and associated activities would continue at Brightwater as Fonterra moved its milk transfer activities there from Tuamarina, he said.

Fonterra is reshaping its business as a period of rapid expansion in the country’s dairy herd comes to an end and the company is preparing its factories for a future of flat or declining milk supply, where it will be looking to extract more value from each drop of milk.

“We know milk supply is declining over time, flat at best, so we need to make sure we are getting the most out of every drop of milk, and optimising our plants to match both consumer demand and available milk supply,” Whineray said.

As part of its long-term strategy to extract more value, Fonterra plans to direct more milk into its food service and consumer business, less into ingredients, and, in some cases, to divert product away from Global Dairy Trade auctions.

“This, along with forecast capital and maintenance costs, means we have made the tough decision to close our milk powder plant at Brightwater,” Whineray said.

“We are continually working to ensure our assets across the country are as efficient as they can be, changing product mixes, and moving more milk into value-add products.”

Whineray said 30 employees would be impacted by the closure of the milk powder plant.

“It is no doubt tough news for some of the Brightwater team and we will be working with them in the coming months on their future options, including redeployment opportunities within the co-op,” he said.

Whineray said he was confident the staff would be able to secure new roles, noting their quality and skills.