Fonterra is in talks with Chinese authorities to see how it can support infants made ill by drinking poisonous baby formula.
Fonterra's 43 per cent-owned Chinese dairy company San Lu is one of 22 firms caught up in a scandal in which the industrial chemical melamine was addedto watered-down milk to boost protein levels.
It is understood that Fonterra chief executive Andrew Ferrier flew out to China last night.
Fonterra spokesman Graeme McMillan said the company understood the Chinese Government was paying compensation for medical and hospital costs.
"We are talking, I think, to some people up there about how we could support it, what we could do to support those who are affected," he said.
Fonterra expected to be in a better position to talk about potential support towards the end of the week.
"Until we can get some more visibility around what compensation has been offered and what else may be anticipated we are unable to comment on compensation to individuals."
The San Lu board was told about the contamination on August 2, authorities were contacted and a trade recall began on August 6, with a public recall starting on September 11.
The Chinese Government has shut down production at San Lu and all products have been recalled.
Mr McMillan said it was up to the Government when San Lu would be allowed to sell products again.
"There's several thousand people employed by San Lu so clearly the Government would like to get this ... sorted out as quickly as it can."
The Wall Street Journal has reported that San Lu, which imported equipment in June or July to identify the contaminant in its milkpowder, had been ordered to increase its investment in imported melamine-testing equipment by five times to 5 million yuan ($1.17 million).
Authorities detained six people on Sunday in Hohhot, capital of Inner Mongolia, which is China's main dairy-producing area, for allegedly selling melamine.
Dozens of people, including some Government officials, have been detained since last month.
