Fonterra extends link with China
New Zealand dairy giant Fonterra has agreed a formal deal with the Chinese government to develop a second 3,000-cow dairy farm in the Heibei province.
The NZ$42m (€22.7m) investment signals the next step in Fonterra's strategy to expand local milk production on the ground in China, following a successful pilot project.
The new free stall dairy farm, to be called Fonterra Yutian Farm, will be developed on 42ha of land in Yutian County, Tangshan City, which is halfway between Beijing and Fonterra's existing farm in Hangu.
The location has good access to water, feed supplies and locally grown crops like corn silage. It will consist of 12 barns, feed storage facilities, 24/7 milking parlour and waste water treatment systems.
The farm will house around 3,000 milking cows, imported from New Zealand and will employ around 100 local people, most of whom will live on-site in a housing facility.
The farm site construction will take around 12 months, with the new herd expected to start milking in November 2011.
The set-up and management of Fonterra Yutian Farm will be similar to Fonterra's first pilot farm in Hangu. Established in 2007, the Hangu farm doubled from 3,000 cows to over 6,000 cows and is currently producing around 25m litres of milk for local consumption.
Speaking at the signing ceremony in Beijing, Fonterra chief executive Andrew Ferrier said China was a very important market for Fonterra, and the company was committed to developing and investing in the local dairy industry over the long term.