Wellington, Nov 6 NZPA - Fonterra is expanding its Echuca plant on the Murray River in Victoria, Australia, to produce yoghurt.

A total of $A21 million ($NZ26.9m) will be spent tripling the Victorian site's capacity, by January 2011.

The company pulled out of the running to buy Sydney-based Dairy Farmers co-operative last year after announcing it had bought the rights to Nestle Australia's yoghurt and dairy desserts business, including the Ski brand and the Echuca factory.

The managing director of Fonterra Brands in Australia, Peter Tedesco, said it was not clear how many jobs would be created.

"There's a lot of work that we need to do before I can give a number, other than (to) say that yes, there will be some new jobs created," he said.

"That will depend on the type of machines that we acquire and how many machines we acquire and what the final configuration of that factory layout will be."