Fonterra is seeking consents to build a new milk powder plant at Pahiatua, more than doubling output from the site and mopping up surplus milk in the lower North Island.
The third drier at Pahiatua would process 2.5 million litres of milk a day, making it a similar size to its new 2.2 million litre-a-day plant at Darfield in Canterbury.
The two existing driers at Pahiatua process 1.4 million litres a day, forcing Fonterra to send a further 1.6 million litres by rail to its Whareroa plant.
"While most of the growth in dairy is coming from the South Island we are still seeing some growth in the North Island and we want to be able to process extra milk in a way that enables the most value to our farmers," said Fonterra's director of NZ operations, Brent Taylor.
Fonterra isn't disclosing the potential cost of the new drier though it spent $200 million on the first stage of its Darfield facility and will spend a further $300 million on stage 2, which is under way.