Fonterra Cooperative Group [NZX: FCG], the world's biggest dairy exporter, plans to build a third farm hub in China in a US$300 million joint venture with New York Stock Exchange-listed Abbott Laboratories, in its latest attempt to latch on to growth in the world's second biggest economy.
The companies signed an agreement to develop a dairy farm hub, consisting of up to five farms and more than 16,000 cattle, producing up to 160 million litres of milk a year, they said in a statement.
The deal is subject to approval from Chinese regulators, and the initial farm is expected to start producing in the first half of 2017, with full production the following year.
"This would be Fonterra's third farm hub in China and will complement our existing farming operations in Shanxi and Hebei Provinces that have been very successful," Fonterra chief executive Theo Spierings said.
"Farming hubs are a key part of our strategy to be a more integrated dairy business in Greater China, contribute to the growth and development of the local Chinese dairy industry and help meet local consumers' needs for safe, nutritious dairy products."
Last year Auckland-based Fonterra announced plans for its second farming hub in Ying County, Shanxi Province to double its Chinese milk production to 300 million litres a year. Fonterra has been looking for partners in the development, in the second step towards producing an annual 1 billion litres of milk in China by the end of the decade.
The deal is the latest Chinese venture for Illinois-based Abbott in a string of investments worth more than US$400 million this year, it said in a separate statement.
Last month Abbott opened a nutritional manufacturing facility in Jiaxing, and it opened two research and development centres in Shanghai earlier this year.
This article is tagged with the following keywords. Find out more about MyNBR Tags
Most listened to
- Tim Hunter on why Veritas is doing it the hard way
- Matthew Hooton on whether Steven Joyce will be the next national leader
- Rodney Hide on why all city planners should be fired
- Nevil Gibson discusses his latest Editor's Insight on films
- The NBR crew throw around some of the week's top stories
- Rob Hosking breaks down the political and economic week that was
- "A tragedy" - David Farrar on his disappointment with Simon Bridges
- New F&P product pipeline exciting, says Macquarie senior investment adviser Brad Gordon
- Taupo Motorsport Park executive director Tony Walker on the park's rebranding
- NZIER senior economist Christina Leung on why she does not think the OCR will hit 2%
- NBR's Cameron Officer talks about the NBR Car of the Year 2015
- John Barnett on Brewer: ‘Boy, has he got a bit to learn’