Fonterra, the worlds biggest dairy exporter, has taken a first step in avoiding import duties into the European market, by forming a joint venture that will source liquid whey from the UK's biggest farmer-owned cooperative, First Milk.
The JV with First Milk will be based at its cheese factory in Cumbria, England. Fonterra's managing director for Europe, Koert Liekelema, said the company is looking for more such deals in the region.
Fonterra's strategy has changed from being an importer of butter and cheese into Europe to developing a suite of protein products for use in the food industry. Sourcing the whey from New Zealand incurs import duties and increasingly New Zealand milk is supplying markets in Asia, Liekelema said.
He declined to put a value on the joint venture or give an estimate for production.
Currently, the First Milk plant dries the liquid whey it produces as a by-product of cheese making and sells it as a commodity product. Using Fonterra's technology, the venture will concentrate and process the whey to make higher-value products, Liekelema said.
First Milk supplies and markets 15 per cent of UK milk.