Westland Milk Products says a new warehouse complex in Canterbury will allow it to significantly reduce its reliance on road transport for getting its products to port.
The West Coast dairy co-operative produces milk powder and butter at its plant in Hokitika, which it then has to transport to Lyttelton for export.
Chief executive Rod Quin says it will move 500,000 tonnes of milk powder a year through its new 17,000 square metre dry storage warehouse at Rolleston.
He says the facility, to be officially opened on Friday, will allow the co-op to reduce truck movements by 6000, as it can utilise a direct rail link from Hokitika to Rolleston, where there will be temporary storage, through to Lyttelton.
Mr Quin says Westland Milk Products has had a good year after the extremely difficult 2008-2009 season.
The company's milk production is up by more than 4%, and it is forecasting its second highest milk payment to its 330 farmer shareholders, of between $6 and $6.30 a kilogram of milk solids.
