A new milk processing dryer may be built by Fonterra in Southland within the next 10 years.
Trade and operations managing director Gary Romano stressed it was still in the preliminary planning stage and the idea had not yet been presented to the co-operative's board.
There was growth in the dairy industry in the South Island and a milk processing factory at Darfield, 45km west of Christchurch, is expected to be operational by August next year.
By then, the Edendale plant's last dryer will be largely full and Fonterra would have to think about extra capacity, Mr Romano said.
Within five years, another investment - most likely in Canterbury - was expected. After that, it was expected something would be built in the South within the next 10 years.
It was not clear at this stage whether it would be built at Edendale or at a new site, he said.
In February last year, the world's largest and most efficient milk powder dryer was officially opened in Edendale.
The ED4 dryer cost $212 million and can handle 4.4 million litres of milk a day.