Fonterra commits to port for 35 years

Port Otago has signed a 35-year lease on its dairy export warehouse and sold the associated logistics
operations to Fonterra.
“D Shed” on Back Beach Road, Port Chalmers, is a 34,200 square metre warehouse and 12,000 square
metre yard used for packing Fonterra Edendale product for export. Now the site is in Fonterra charge, it
will be known as “Fonterra Port Chalmers” and operate as a pack point for the cooperative. The 16 skilled
Port Otago D Shed employees are now employed directly by the co-operative (effective 28 November).
Port Otago Chief Executive Kevin Winders says the lease allows Fonterra to run the site as another of its
nationwide in-house distribution centres.
“The long-term lease and sale of our D Shed logistics business to Fonterra works for all parties. From Port
Otago’s perspective, it allows us to focus on our core business. From Fonterra’s perspective, it has control
of the supply chain/warehousing operations right to the wharf, allowing for increased opportunities to
improve efficiencies and lower business costs.”
Fonterra's Director of Global Supply Chain Santiago Aon says the distribution centre plays a pivotal part
in the lower South Island supply chain network, with the acquisition being good for the co-op, customers
and community.
“This transition is part of our overall strategy to control operations at strategic sites. It allows us to
enhance efficiency and strengthens our supply chain network.
“Fonterra is committed to continue fostering collaboration with the existing teams at Port Otago and is
working closely with on-site staff ensuring a smooth transition for all stakeholders.”
The lease has triggered a series of roading and fencing changes between the Fonterra site and the Port
Otago log yard, and along Beach Street towards the Cruise Terminal. This moves the Fonterra facility
outside of the port’s maritime security zone.