Dairy demand on the rise: Fonterra

Posted by Daniel Palmer on 11th December 2009

China’s dairy sales are starting to recover from the damage done by the melamine scandal last year, Philip Turner, managing director at Fonterra China, has revealed.

“Sales were substantially damaged. We’re probably back to where we were in August last year. From now, we expect growth will revert to trend, at about 9-10% per year,” Turner said on the sidelines of a nutrition conference in Beijing this week.

Fonterra is the largest exporter of dairy products to China. The company also owns a farm in Tangshan and is looking at a number of sites around Beijing and neighbouring Hebei province to set up additional farms.

“It’s a high-priority project,” said Turner. “China is 90-95% self-sufficient in milk production but the real challenge is how to meet demand for quality milk fast enough.”

He declined to reveal when new farms will be opened but said they would be fully controlled by Fonterra. The company previously owned a stake in local dairy Sanlu but had to write off its investment after the firm went bankrupt following its involvement in the melamine scandal.

China is the world’s fourth-largest dairy industry and could become the second-largest behind India in the next decade, Turner said.

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