June 7, 2012

The groundbreaking follows an announcement Nestle made in January, in which the company committed to transform Shuangcheng, one of its largest fresh milk supply bases in China, into the country's benchmark for dairy farming and management best practices.

The January 11th Memorandum of Understanding between Shuangcheng Municipal Government and Nestle engages the parties to jointly develop modern dairy farming practices. Under the agreement, a total of RMB2.5 billion or US$3.9 million will be invested between all parties in the milk district over the next five years through a partnership between Nestle, the local government, investors and farmers. The Dairy Farming Institute is an important next step to put the MOU into practice and will focus on training dairy farmers and technicians. The first construction phase of the institute will be completed by the end of 2012.

The Dairy Farming Institute occupies 600,000 square metres and is supported by three different types of training farms, including one cow base with 1,520 cows, which provides practical guidance for farmers working alone or on small farms to relocate to a professionally managed farm; one large farm with 1,200 cows and one mega farm with 8,000 cows to help those who own larger farms scale up their facilities and use more modern practices.

The Institute demonstrates how modernised and professionally managed farms can improve efficiency in productivity. At the same time, it marks a new reference for an environmentally, socially and economically sustainable farming model, which will lead the direction of future dairy farming development.

The professional training will benefit the whole industry and eventually be open to all dairy industry members. It is a top class training school for transferring knowledge to many dairy professionals from Shuangcheng and all over the country.

The Dairy Farming Institute is a platform for dairy business partners that will bring together experts in feed, genetics and other fields from around the world. It will offer dairy practitioners world class training on dairy cow feeding and management.

Cooperation agreements were signed between Nestle and some industry leaders including Land O' Lakes, Alta and East Rock Limited.

"In line with the government's 12th five year plan for animal husbandry, the Dairy Farming Institute groundbreaking is a very important step for Nestle to promote the modernisation of the dairy industry in Shuangcheng and beyond. It also underscores Nestle's commitment to growing our dairy business in China in a long-term and sustainable way," said Heiko Schipper, managing director of Nestle Food & Beverage Division, GCR. "The emphasis will be on training the farmers, so that they are prepared to modernise their farms and deliver high quality milk in an efficient and environmentally responsible way. It all starts with the skills of the farmer and that is our first priority.''

Nestle has been investing in Shuangcheng to develop its milk district since 1987, three years before the Nestle Shuangcheng dairy factory became operational. Since then, Nestle has promoted scale and modern dairy farming through free training and technical assistance. More than 7,000 farmers were trained in 2011.