Fonterra eyes India and South America

Fonterra chief executive Andrew Ferrier. Photo / Dean Purcell

Fonterra may develop farms in South America and India to meet rising demand.

Chief executive Andrew Ferrier said at a conference in Rotorua yesterday that the company may also add multiple farms to its existing Chinese business.

Fonterra wants to expand its business as rising incomes and growing populations in Asia and other emerging markets fuel demand.

Whole-milk powder reached a record $4958 a metric tonne last month.

"All are markets that we see demand for safe, fresh, local milk will increase very substantially over the next 10 years," Ferrier said. "We'll be selling them New Zealand milk with local milk."

The company agreed in October to develop a dairy farm in China's Hebei province to expand local milk production. Its existing Tangshan farm has doubled to more than 6000 cows since it opened in 2007 and produces about 25 million litres of milk for local consumption.

Demand for imported milk products from India will also expand, Ferrier said.

"India is basically self-sufficient today but the projections are their growth will go faster than their ability to grow domestic production."

- BLOOMBERG