Nestle, the world's largest food company, and Fonterra plan to open a new dairy in Brazil this year.
The companies - Auckland-based Fonterra is the world's largest exporter of dairy products - will invest as much as 70 million reais ($51 million) in the plant, according to aNestle statement.
The factory will be located in Palmeira das Missoes, in the southern state of Rio Grande do Sul, and rank among Brazil's five biggest dairies, Nestle said.
Production capacity is projected at 1 million litres a day.
Ivan Zurita, president of Nestle Brazil, said in June that the company planned to invest 400 million reais in the country in 2008 through acquisitions and plant expansions.
Nestle intends to double annual sales in Brazil by 2011 from 11 billion reais in 2006. The investments will boost yearly production by 50 per cent.
