May 23, 2012

Fonterra expects increased market opportunities in China, despite the latter expanding its local production.

Fonterra expects Chinese dairy consumption will double by 2020, to more than 70 billion litres of milk a year.

Fonterra has five dairy farms in the first stage of a major development near Beijing, producing 150,000 million litres a year.

President of Fonterra China, Phil Turner, says dairy exports from Australia and New Zealand can still grow.

"We've got in mind a figure of around a billion litres that we would be comfortable getting to before the end of this decade," he said.

"But even then that would only be, I wouldn't say a drop in the bucket, but a fairly small proportion of China's overall milk supply."

Mr Turner says China currently produces 35 billion litres of milk a year, compared to New Zealand's 18 billion litres.

Fonterra was a shareholder in Sanlu, the Chinese company caught in the melamine contamination scandal in 2008. Mr Turner says Fonterra sold those shares and wrote off the loss.