The giant co-op announced last August it was investing the large sum to transform the site into a centre for high-value advanced proteins.
Ingredients will go into premium products such as medical nutrition and high-protein sports products, due to roll off the line next year.
Eventually, the new plant will support six new roles with about 60 contractors on the job over 16 months of construction.
They have already completed the foundations and walls for the new processing extension for the plant and the project remains on budget.
Large equipment arrived this month for powder milling, with work progressing to make the building watertight in April.
Processing equipment such as new powder storage bins, batching tanks and a high-pressure pump is being put in with this work continuing through to next month.
Ongoing work will modify processing systems including a dryer safety upgrade and installing a powder mill, along with connecting steam, water and air, while high-pressure feed lines and a connection to the powder transfer system are also going in.
The addition of local contractors from Timaru supporting this phase of the project has stepped up activity at the site.
Studholme site manager Alan Maitland said managing a big building project and maintaining ongoing milk processing was going smoothly.
Mr Maitland said there would be less manufacturing in January and February than previous years as a result of an extended shut window to accomplish the work.
The advanced proteins plant build is being run as a ring-fenced project. However, it is tightly integrated operationally with the rest of the site because of the project’s many work streams.
Mr Maitland said the site was "buzzing" with activity as the project moved through key stages.
“It’s exciting to see this expansion starting to take shape. We’re making great progress, and once completed, this new plant will be a significant step forward for both the site and the co-op in delivering high-value advanced proteins for our global customers.”
He said the expansion sent a strong signal about Studholme’s importance to the co-op’s future, reinforcing its position as a key player in high-value dairy ingredient production.
The six new positions will be added to the existing workforce of 47 employees.
High protein dairy is projected globally to grow by nearly $US10 billion ($NZ17.3b) over the next four years, at a growth rate of 7% per year.
The investment is part of Fonterra’s strategy to grow value through its ingredients and food service business, while developing deeper partnerships with customers.
Studholme will continue to support milk processing across the South Island, a role it has played since Fonterra bought it in 2012.
