Fonterra progresses purchase of two farm sites in China
Fonterra has signed an agreement to progress the purchase of two dairy farm sites in China with a goal of building a supply of New Zealand standard milk there.The New Zealand dairy co-operative established Tangshan Fonterra Farm in Hebei province -- about
Fonterra has signed an agreement to progress the purchase of two dairy farm sites in China with a goal of building a supply of New Zealand standard milk there.
The New Zealand dairy co-operative established Tangshan Fonterra Farm in Hebei province -- about 180km east of Beijing -- in 2007 as a pilot project.
Today, it signed an agreement with the government of Yutian County which formalises the final stage of due diligence on two potential Fonterra dairy farm sites. Yutian County is around 115km from Tangshan Fonterra Farm.
Fonterra China managing director Philip Turner said the agreement was a positive step in the negotiation process but there were still some critical issues to be resolved by Yutian County before the transaction could be finalised.
Fonterra had demonstrated that it could produce high quality milk profitably at its existing farm in China, he said.
"We've always said that we believe the bulk of China's growing demand for dairy will be met by locally produced milk," Mr Turner said.
"By investing in two further farms, we are building on our commitment to build a safe, secure and sustainable milk supply for our customers in China."
The Tangshan Fonterra Farm was established with 3000 New Zealand cows. It now has 5800 cows, half of which are milking.
The imported New Zealand cows are now into their third lactation after calving for the third time since their arrival in China. The farm produced around 25 million litres of milk last financial year.
In New Zealand, a Chinese bid to buy 20 New Zealand farms from receivers has been controversial. The Overseas Investment Office said today that it continues to assess Natural Dairy's application against the requirements of the Overseas Investment Act 2005 and no decisions have been made.
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