Fonterra’s second farm in China – Yutian Farm One – is officially open, and there are two more large-scale Chinese farms in the works.
Chief executive Theo Spierings said Fonterra would be be investing $100 million in a further two farms in the same province, Hebei. Construction of its third farm, also at Yutian County, is underway.
“This will mean we will have a hub with five farms within the area. Combined, they 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."
Spierings said China was a significant priority in Fonterra’s refreshed global strategy.
With consumption in China expected to double by 2020, the country will be consuming more than 70 billion litres of milk every year by 2020.
“It is clear that much of this growth in demand for dairy nutrition will be met from local production. “An integrated business all starts with a safe, high quality local milk supply. Our intention is to develop separate farming hubs across China, with the ultimate goal of producing up to 1 billion litres of high quality milk every year by 2020.”
Yutian Farm One is currently milking around 2200 cows and producing around 11 million litres a year. At full capacity it will reach 30 million litres, he said.
Fonterra's first farm in Tangshan opened in 2007.