By LIAM DANN
Fonterra is set to take a big step into the Chinese market by entering into a joint venture with the state-owned Sanlu dairy company.
New Zealand Milk managing director David Pilkington yesterday confirmed reports out of China that the companies were negotiating a partnership. Sanlu is one of China's
10 largest dairy companies.
"We have been working on developing a local partnership to achieve growth in the Chinese market," Pilkington said. "Our discussions with Sanlu are progressing favourably. We hope that we will have an arrangement in place next year."
New Zealand Milk is Fonterra's fast-moving consumer goods business. It controls popular brands such as Anchor and Mainland.
The goal was to use local knowledge and experience in the Chinese market, Pilkington said.
Any New Zealand Milk joint venture with Sanlu would be based around consumer dairy products. Fonterra's position as a supplier to the dairy ingredients market in China would be unchanged.
Reports in the Chinese media suggested Fonterra was likely to use a unified Chinese brand for all its dairy products in the country.
They said the company planned to move the headquarters of its Chinese subsidiary Anjia Dairy from Guangzhou to Shanghai next year.
