Retailing, Franchising, and Consumerism Business Intelligence in China

Nestle To Create New Milk Source In Inner Mongolia

The Swiss food and beverage firm Nestle has signed a cooperation agreement with local government of Hulunbeier, Inner Mongolia Autonomous Region, to establish a new milk source zone.

Based on the agreement, the two parties will jointly build a milk cow base in Old Barag Banner county. On its completion at the end of 2013, it will have 2,000 cows. The new dairy farm in Old Barag Banner is Nestle's second milk source region in Hulunbeier, following the construction of the first one in Ergun Banner in 2007.

By providing plenty of high-quality fresh milk, the new dairy farm will meet Nestle's growing demands for raw materials so as to help the company satisfy Chinese consumers' demands for dairy products.

The official website of Nestle shows that the company buys fresh milk from 25,000 Chinese dairy farmers and provides them with an overall income of around CHF500,000 per day. These farmers serve three Nestle factories in the country.

Nestle's milk factory in Hulunbeir, inaugurated in July 2007, is situated in an area of high-quality natural grasslands, on which 5,600 farmers graze their cows. The factory provides a reliable market for locally produced fresh milk, which is used to meet the rising local demand for milk powder and other dry, condensed and evaporated dairy products. Nestle also provides 54 collection centers in the milk district, 12 of which have chilling facilities, and aims to transfer milk from each chilling center to the factory within two hours.

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