Fonterra to complete purchase of Brazilian dairy farm

Posted by Rita Mu

New Zealand-based dairy company, Fonterra, is in its final stages of completing the purchase of an 850-hectare farm in the mid-west of Goias State in Brazil.

The company has signed a conditional sale and purchase agreement for the farm, which is expected to feature a pilot dairy facility with two milking platforms with a herd of 3,300 cows.

Chief Executive Andrew Ferrier said Fonterra’s investment in the farm would be the first step in developing a source of fresh milk in Brazil to support Dairy Partners Americas (DPA), Fonterra’s South American joint venture with Nestlé.

“We have already invested through DPA in helping to improve the efficiency of dairy farming in Brazil,” Ferrier said. “This pilot project will allow us to develop and test the right model for our own dairy farming operation.”

“Brazil is Latin America’s largest economy, with 200 million people. The growing and increasingly prosperous population is driving strong demand for fresh dairy products. This demand will be met by milk produced locally.”

According to Ferrier, global demand for dairy products is forecast to rise steadily.

“Demand for dairy around the world is growing by 2 per cent per annum,” Ferrier said.

“New Zealand milk will always be our top priority. While New Zealand milk production is forecast to grow at a long term average of two to three per cent – we are looking offshore to supplement this and ensure we meet the growth potential for dairy globally.

 “Developing sustainable, high quality milk supply for key customers in rapidly developing economies such as Brazil and China is a powerful way of achieving our strategy of being the natural source of dairy nutrition for everybody, everywhere, every day.

“We are sourcing more milk overseas – 6.6 billion litres last year, or around 31 per cent of our total.  Our international farming operations are in line with this strategy of complementing New Zealand milk.”

In addition to the Brazilian dairy farm, Fonterra is conducting a feasibility study into a potential large-scale joint venture dairy farm in India.

In 2007, Fonterra established a Tangshan Fonterra Farm in China, which consisted of 6000 cows. Last year, the company announced plans to develop a second farm in Yutian County.

The company is expecting the sale of the Brazilian farm to be completed next month.

Image: newstalkzb.co.nz

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