The drier will produce 5% of Fonterra's total capacity within two years.
ED4, capable of producing 30 tonnes an hour, is working alongside three other driers, one producing seven tonnes an hour and two at 14 tonnes an hour.
The site is now capable of handling 15.1 million litres of milk a day.
Fonterra Trade and Operations managing director Gary Romano said the $212 million investment represented the faith in the dairy industry in this part of New Zealand.
"To build a facility like this for New Zealand . . . in Southland . . . to get a project like this up and going on budget and on time . . . is just a testament to the engineering and construction companies that were employed to build the [plant]. There is an Edendale and a Southland feel to the place."
He said, to the best of his knowledge, the plant, which created an extra 31 jobs, was the single biggest investment in Southland in recent history.
Once ED4 reached capacity, the Edendale site would supply 20% of Fonterra's market from the site, generating revenue of $2 billion a year.
Fonterra Edendale site manager Keith Mason said it was a huge day for the company and for the community.
"This is the largest drier in the world, but it's much more than that. It's not just the asset that we've produced or the way it's been put together, it's the collective knowledge [that has produced] the most advanced and largest drier in the world," he said.
About 3500 people, including 600 shareholders, went for a tour through ED4 yesterday.
Mr Key said that in 2005 New Zealand was buying more from the world than it sold.
"We have been in a recession from that perspective for about five years. One in every four dollars of New Zealand's export earnings comes from Fonterra . . . it gives you a sense of how important it is. We support the moves that Fonterra is making . . . we want [it] to be a global company.
"We want Fonterra to dominate in the world when it comes to dairy products and we think they have the capacity to do that," Mr Key said.
Fonterra chief executive Andrew Ferrier said ED4 contained something that no other dairy processor in the world could match right now.
"In this plant . . . we can turn our farmers' milk into product more efficiently than any of our competitors. That's at top quality and a lower cost, using less of our key inputs like energy, and faster than anyone else. It's what our farmers and our industry have always been good at," Mr Ferrier said.
