Fonterra Expands Outside New Zealand, Builds Dairy Farms in China

Fonterra Co-Operative Group Ltd. CEO Andrew Ferrier has said his company plans to expand outside New Zealand, particularly in China. Fonterra, which has sales near $13 billion and produces about a third of the internationally traded dairy products globally, is building dairy farms in China; this follows the 2008 contaminated milk scandal involving Shijiazhuang Sanlu Group Co., which was 43-percent owned by Fonterra and prompted it to take control of all aspects of its operations in China. Ferrier sees growing wealth and population growth increasing demand, even as climate change and increasing costs of production push up milk prices worldwide. He added that Fonterra will not sell genetically modified milk products in countries where consumers do not want them, and is instead focusing on selective breeding of cows to improve milk quality and production.