Fonterra to target India

Amul looks set for competition. New Zealand-based dairy giant Fonterra is eyeing India’s booming demand for dairy products, and hopes to complete the feasibility study of a dairy joint venture with Indian Farmers Fertiliser Co-operative by next year, according to Greg Gent, Fonterra board member, in a recent interview in the Wall Street Journal newspaper.
India is the largest producer of milk in the world, with an output of 112 million metric tons in 2010. The country’s National Dairy Development Board has forecast that the milk demand will reach between 180 and 200 million tons by the end of the decade.
Fonterra has been supplying dairy products to India, along with pharmaceutical-grade lactose to the pharmaceutical industry, via its joint venture, DMV-Fonterra Excipients. Fonterra also has been supplying the country’s National Dairy Development Board with dairy products over the last two years, which is distributed through various farmer co-operatives.
The New Zealand concern will develop a business plan for India once the feasibility plan is established. The joint venture may initially look to set up one or two dairy farms in India, according to Gent.
A planned free-trade pact between India and New Zealand may also help the co-operative get access to direct customers in the country, he notes. Currently, India’s federal government controls and decides on the procurement of such products.