Fonterra plans two more farms in China

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The Timaru Herald | 14 April 2012
Former Fonterra Chief Executive Officer Andrew Ferrier at a press conference in Beijing on Friday. Fonterra plans to produce up to 1 billion litres of milk every year on its farms in China by 2020 (Photo: China.org.cn)

GERALD PIDDOCK AND FAIRFAX

Fonterra will spend $100 million developing two new dairy farms in China, increasing to five the number of farms the co-operative has in the country.

Fonterra announced the expansion on Thursday when it opened its second farm called Yutian Farm One in the Yutian province.

Speaking at the opening ceremony in China, Fonterra chief executive Theo Spierings said China is a significant priority in Fonterra's refreshed global strategy.

"We have a long history in China and we are committed to the further development of the local Chinese dairy industry. We want to establish an integrated milk business in China that processes high quality milk from Chinese farms into dairy nutrition for Chinese customers and consumers," he said.

The country will be consuming more than 70 billion litres of milk every year by 2020.

Mr Spierings said their intention was to develop separate farming hubs across China, with the ultimate goal of producing up to 1 billion litres of milk every year by 2020.

The co-operative's first farm in Tangshan, China opened in 2007.

Yutian Farm One is milking around 2200 cows and producing around 11 million litres a year. At full capacity it will reach 30 million litres of high quality milk a year.

The five farms combined will have a herd size of around 15,000 milking cows producing 150 million litres a year and all nearby a large market like Beijing.

"We will be using local suppliers, partners and contractors to build our two new farms and when all five farms are up and running we will be employing around 500 local staff to operate them. This investment will flow right through the local economy."

Meanwhile, the Government is expected to announce any day whether Chinese company Shanghai Pengxin, preferred bidder of the receivers of the Crafar dairy farms, can buy the 8000-hectare estate. Government consent earlier this year was sent back to the drawing board by the High Court after a group of aspiring Kiwi farmer and iwi buyers, led by Sir Michael Fay, sought a judicial review of the decision.
Original source: Timaru Herald
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