Retailing, Franchising, and Consumerism Business Intelligence in China

Abbott, Fonterra Team To Build Milk Farm In China

Abbott and Fonterra have signed an agreement to jointly build a cow breeding base in China.

This is reportedly the first time for Abbott to enter the upstream milk farm sector.

According to the agreement, if this project is approved, Abbott and Fonterra will jointly invest USD300 million, which is about CNY1.8 billion, to build a cow breeding base. This cow breeding base will have five pastures, over 16,000 milk cows, and an annual production of 160 million liters of milk. The cows will be imported from abroad or from Fonterra's existing milk farms in China.

If this project is approved by related Chinese authorities, the first milk farm will be completed and put into production in 2017, while others will start operation in 2018.

Prior to this, Abbott's new nutritional product plant in Jiaxing, Zhejiang, was put into operation in June 2014. Miles White, chairman and chief executive officer of Abbott, said that those pastures will help strengthen the company's dairy supplies to the Chinese market.

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