17 September 2010

2 minute read

Asia

Fonterra China Managing Director Philip Turner said: “This agreement is a positive step in the negotiation process with Yutian County.

“We’ve always said that we believe the bulk of China’s growing demand for dairy will be met by locally produced milk.

“Our first farming operation in China, Tangshan Fonterra Farm, which was established in Hebei Province in 2007, has succeeded in demonstrating that we can produce high quality milk at good volumes, profitably.

“By investing in two further farms, we are building on our commitment to build a safe, secure and sustainable milk supply for our customers in China.”

Mr Turner added that: “We are pleased with today’s agreement and the progress to date but there are still some critical issues to be resolved by Yutian County before we can finalise any transaction.”

Yutian County is located around 115 kilometres from Tangshan Fonterra Farm. The farm was established as a pilot project to test Fonterra’s ability to produce New Zealand standard milk in China.

Established with 3000 New Zealand cows, it has since grown to more than 5800 cows, half of which - on average - are milking.

The imported New Zealand cows are now well into their third lactation after calving for the third time since their arrival in China.

The farm produced around 25 million litres of milk last financial year.

Meanwhile, the closing date for the current timeline for Fonterra shares has been extended from 21 September to 30 September 2010.

Chairman Sir Henry van der Heyden said the Co-operative would be announcing its 2009/10 financial results on 23 September, including the dividend which is paid on shares.

“This gives farmers some extra time and means they can consider the results in making any decisions to buy extra shares – up to their additional share entitlement.”

Fonterra farmers are able to buy shares during a defined period each year, which opened on 1 June 2010. They are entitled to hold shares up to 120% of their milk production.