Careful choice of partners and credibility with investors sought.
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FONTERRA wants a bigger footprint in China and says that owning three farms is a trial in the growing dairy industry there, rather than being the end of its investment.
replica bag wholesaleTrade and operations manager Gary Romano says about 220,000 tonnes of milk products end up in China, which is 10 per cent of Fonterra's production.
"We want a larger footprint in China, but I won't say how large that might be."
At present, Fonterra has 3000 cows in China milking three times a day. It has announced it is buying two more farms.
"We'll see how they go. We will move cautiously," Mr Romano says.
Animal welfare is not an issue, with cows living in barns.
"The cows can move around. There is no issue of any kind. We're agnostic here about cows living in barns."
But he acknowledges Fonterra's three farms "won't cut it in China. We have to either expand or sell the farms."
Fonterra is interested in getting ownership and milk supply right, after its investment in SanLu came back to bite Fonterra, when the Chinese company was involved in the melamine-tainted milk scandal.
"One hundred per cent ownership is not an option in China. Fonterra needs partners. We are being very careful in selecting them. We've got to give ourselves credibility with investors, who also have credibility."
Mr Romano emphasises the growth potential in China.
tag heuer replica"The dairy industry produces 28 billion litres a year. We export a fraction of that - one million litres - but by the end of the decade, China will need 80 billion litres of milk a year. Can they supply that themselves? It is unlikely."
As the dairy market changes, the United States, Europe and Latin America are all potential, he says.
Fonterra will have to be agile on its feet, given the potential competition, he says.
"We can't not be in China. Our customers want us there and the New Zealand Government wants us there. We're cautiously optimistic, and I hope there won't be, but there will probably be a few whoopsies on the way."
Fonterra wants to control the milk-supply chain, although not from a 100 per cent ownership point, he says. There is also potential in the restaurant and food- vendor market.
"At the moment, 20,000 tonnes of New Zealand dairy products go into the food-service business in China. We want to maintain that and the food-service business is expected to boom."
A branded dairy market also exists for Fonterra's Anlene and AnMum being manufactured in New Zealand and sent to China. In the future, that could be produced there. The melamine scare has also meant a bigger market for Fonterra's goods, as Chinese consumers look for safe dairy products.
Fonterra expects exports to dip.
"Ultimately, we want to supply the final product there. It doesn't make sense to ship tins. That is not the model we want."
fake rolex Stainless steel is expensive in China, Mr Romano says, but Fonterra has plenty of potential partners keen to work with it to build manufacturing sites in C
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