Fonterra expands in China
Fonterra will open a second farming hub in China with the facilities to farm 15,000 cows as the country's demand for fresh milk grows.
The farming hub will be in Ying County, Shanxi Province, and the New Zealand dairy giant said it was looking to secure strategic partners in the development.
The hub would comprise five 3000-cow farms, with production expected to start in the second half of next year, Fonterra said, adding it was the next step in the company's strategy to produce 1 billion litres of milk in China by 2020.
Fonterra would not say how much the development of the farming hub would cost.
Fonterra Greater China and India president Kelvin Wickham said the hub, its second in China, was part of its strategy to become a more-integrated dairy business in China.
"Ying County provides an ideal environment for us to expand our farming operations due to its new agricultural zone, proximity to customers and the high-quality supply of animal feed available in surrounding areas."
Fonterra would employ more than 500 people in Ying County, of which about three quarters would be local employees, the dairy company said.
The new hub would build on the company's existing investment in Hebei Province.
Raw milk supply growth in China had been about 2 per cent during the past three years but demand was now growing at about 6 per cent to 8 per cent, Wickham said.
Fonterra's two hubs in China would produce a total of up to 300 million litres of milk a year when fully operational.
Fonterra said it had received support from the Chinese government and the company had extended its farmer training programme to Shanxi to support the new hub development and to build the strength and capability of the local industry. Fairfax NZ
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