Fonterra buying land in Brazil for pilot dairy farm

Thursday 12th May 2011

Fonterra is in the final stages of buying land in Brazil where it plans to develop a pilot dairy farm.

The farmer cooperative today said the move was in line with its strategy of establishing best practice dairy farms in fast-growing economies of Asia and Latin America.

It has already established a 6000-cow farm in China, in 2007, has announced plans to develop a second Chinese farm, and is conducting a feasibility study into a joint venture dairy farm in India.

In the latest overseas development, Fonterra said it had signed a conditional sale and purchase agreement to buy an 850ha farm in the mid-west of Goias State in Brazil. It was now carrying out final due diligence with a view to concluding the sale next month.

The aim was to develop two milking platforms with a total herd of 3300 cows, which would be producing milk by late 2014.

Fonterra chief executive Andrew Ferrier said the company's investment in a pasture-based dairy farm would be the first step in developing a source of high quality fresh milk in Brazil to support Dairy Partners America (DPA), its joint venture with Nestle in South America.

Fonterra had already invested through DPA in helping improve the efficiency of dairy farming in Brazil, and the pilot project would allow the company develop and test the right model for its own dairy farming operation, Ferrier said.

The proposed Brazil farm location offered good access to water, while the soil quality, temperature and climate would allow year-round farming on the pastoral model. If the pilot proved successful, Fonterra intended to develop more farms in Brazil.

Fonterra last year sourced 6.6 billion litres of milk overseas - about 31% of its total - in a strategy to complement New Zealand milk.

NZPA

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