Sri Lanka Fonterra unit to double yoghurt production

May 13, 2008 (LBO) – Fonterra Brands Lanka is investing 1.2 billion rupees to double yoghurt output and boost local raw milk supplies to cushion against volatile international prices, an official said. "The Sri Lankan yoghurt market has experienced double digit growth in the past five years and consumers now eat more than 12,000 metric tonnes of yoghurt annually," Fonterra managing director Achyut Reddy said Tuesday.

The company's current yoghurt manufacturing line has a capacity of six million cups a month which will be raised to 13.5 million with the new production line.

The three-year project will also expand Fonterra's daily milk requirement to 52,000 litres which would be supplied by 3,000 local dairy farmers.

"The project will include Fonterra establishing new raw milk collection centres throughout the country to assist in processing the required increase in volume," Reddy also said.

In the first year of the expansion project, Fonterra will focus on collection and processing of milk for yoghurt, while packing capacity will be enhanced during the second year, he said.

The company also plans to provide local dairy farmers with technical assistance on increasing production,