Fonterra expands Chinese dairy presence

Fonterra is continuing its expansion in China with the purchase of two dairy farms in Hebei Province, according to a report in the Otago Daily Times. The farms, about 120km east of Beijing on a 80 hectare double site, will each house about 3350 cows and together produce up to 65 million litres of milk annually once fully operational. The buy completes Fonterra’s plan to build a hub of dairy farms in Hebei province. Demand for dairy in China is expected to double by 2020, with a lot of the growth met from local production.

Once fully operational, the Hebei Province hub is expected to produce about 150 million litres a year. The start of production is planned for next October. The double site will operate as two farms with separate 50-bail parallel milking parlours and cow barns. The herd for the two farms will consist of Chinese-born cows bred on Fonterra’s other farms and supplemented by about 4300 cows shipped from New Zealand. Fonterra intends to develop several more hubs through China, with the goal of producing up to one billion litres of milk by 2020.