Dairy farm a 'cash cow'

NEW ZEALAND - Fonterra is set to establish a 3000-cow demonstration farm in China to help expand the Shijiazhuang San Lu Group, in which it holds a 43 per cent stake.
calendar icon 15 December 2006
clock icon 1 minute read

The farmer-owned cooperative's milk supply director, Barry Harris, said the farm would employ New Zealand dairying's on-farm knowledge and production expertise to provide quality milk to San Lu and help meet demand for "premium nutritional consumer products".

"By developing a cow-to-consumer supply chain in China we will be able to create value for our joint business and improve returns to our respective shareholders."

The move comes in the midst of a rapid expansion in China's dairy industry. Milk production is expected to increase from 22 billion litres to 40 billion litres in seven years' time. At the same time, dairy produce consumption is tipped to grow rapidly.

Fonterra has estimated that China's retail dairy sales will expand 55 per cent to US$7.9 billion (NZ$11.63 billion) by 2009.

It is the largest exporter of dairy ingredients to China with exports worth about $200 million last year

Source: Stuff.co.nz

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