Dairy giant Fonterra sets sights on Europe
NZ firm's boss says Ireland has biggest potential for growth
Fonterra is in talks with 10 different European dairy processors with a view to a joint venture in cheese and whey production.
Letters of interest have already been signed with at least two of these, with Fonterra's European general manager, Koert Liekelema, refusing to rule out the possibility of the involvement of a British or Irish company.
"The global footprint of milk from New Zealand is actually going to shrink as we focus more on servicing Asia which is the fastest growing market in the world at the moment," said Mr Liekelema.
One third of all the milk that Fonterra currently processes is already sourced outside of New Zealand. However, the company now wants to access large volumes of extra milk around the world to cope with surging demand.
"The sooner we increase our milk pool to the point that 50pc of all our milk is sourced outside of New Zealand the better, because we are short of milk right now," said Mr Liekelema, who addressed a food and agribusiness event in Dublin last week.
"We're going to process local milk and our main focus is on countries with the most potential for expansion post quota in Europe."
The Fonterra boss said Ireland, Britain, Holland, Germany, France and Poland had the most scope to expand, but that Ireland had more potential than most.
"Ireland has the biggest leeway to expand," he said. "For example, Dutch dairy farmers are required to reduce carbon emissions over the coming years, which will hamper their scope for growth. We're interested in linking with a hard cheese manufacturer that has scale and is willing to invest.