Asia's growing taste for New Zealand cheese is driving Fonterra to increase its capacity to process milk into cheese products.
On the back of falling dairy prices, the co-operative recently announced it would reduce the amount of whole milk powder it puts on the global dairy trade auction, and instead increase the amount of milk going into other products.
Managing director of global operations Robert Spurway said over the past year the company had grown its capacity for UHT milk, instant quick frozen mozzarella, cream cheese, and a cheese slice plant.
Mr Spurway said while there was growing demand for cheese, particularly in Asia, he did not expect it to become a major export like whole milk powder.
"The mozzarella, that's primarily for pizza toppings in our food service business and we're seeing demand from right across Asia, including China.
"We top about 300 million pizzas in China each year with Fonterra mozzarella and that's been growing strongly.
"If you look at our total food service business, not only is it an increasing share of our milk, it's on a much bigger volume of milk that has grown in New Zealand over the last five or more years."
