The distribution hub, inaugurated yesterday by New Zealand Minister for Primary Industries Nathan Guy, will enable New Zealand-based Fonterra to hold more than 5,000 tonnes of ingredients for quick supply to customers in more than 70 countries across Africa, the Middle East, and the CIS region (former Soviet states including Russia).
Fonterra, the world's largest dairy exporter, currently sells more than $2bn (NZ$2.4bn, €1.45bn) worth of ingredients, including whole milk powder (WMP), skim milk powder (SMP), anhydrous milk fat, cheese, and butter, across these areas.
These geographies represent a “significant market for Fonterra dairy exports from New Zealand," said Miles Hurrell, general manager of Fonterra in the regions.
“Our ingredient imports into this region have continued to grow 10% year-on-year, and our investment in this facility reflects this growth. By storing product in market, we can provide our customers with greater flexibility, significantly reducing product delivery times and providing access to high quality dairy ingredients as and when they need it,” he said.
Fonterra plans to expand the capacity of the warehouse "over time," Hurrell added.
"Important region for NZ trade"
Until now, Fonterra's presence in Africa and the Middle East currently consists of several regional offices and its Saudi New Zealand Milk Products (SNZMP) manufacturing facility in Damman, Saudi Arabia.
New Zealand Minister of Primary Industries Nathan Guy, who was on hand for the ribbon cutting ceremony, believes that the warehouse signals the importance of the Gulf region to New Zealand dairy exports.
He tweeted that the Middle East has become "an increasing important region for NZ trade."
Opened a new Fonterra warehouse near Dubai today. This is an increasingly important region for NZ trade pic.twitter.com/iSsvw7K1a7— Hon Nathan Guy (@HonNathanGuy) March 2, 2014
Guy's paid Fonterra's new facility a visit as part of a wider trip to Saudi Arabia, Oman and the UAE.
In a statement, Guy branded the visit "an opportunity to build on New Zealand's already well-established relationship with key agricultural and food export markets."
“In 2013 New Zealand exported $1.6bn of primary products to these three markets, and our agricultural expertise is in strong demand as states in the region look to improve their food security," he said.