Fonterra is planning a new storage and distribution centre at its Te Rapa manufacturing site in Waikato.
Logistics network Director Mark Leslie said the $27 million dry store will more than double storage capacity at the site.
He said it is also going to make sending milk products to market a lot easier and more efficient, saving about $5 million per year in operating costs.
"By increasing capacity on the back of the site there we'll be able to hold the product on the site and and move it straight from there, containerise it and send it to port for export. So taking out a lot of inefficient moves in that process."
Mr Leslie said construction of the new dry store will begin late next month and will take a year.