ABBOTT PARK, Ill. and
AUCKLAND, New Zealand
July 10, 2014
/PRNewswire/ -- Abbott (NYSE: ABT) and Fonterra Co-operative Group Ltd today announced the signing of an agreement to develop a proposed dairy farm hub in
. The strategic alliance, which is subject to Chinese regulatory approval, will leverage Fonterra's expertise in dairy nutrition and farming in
and Abbott's continued commitment to business development in China.
Dairy consumption in
has been rising steadily over the past 10 years. The continued development of safe, high-quality milk sources is essential to meeting this growing demand from Chinese consumers. Abbott and Fonterra are pleased to be able to work together and, through this alliance, make a positive contribution to the growth and development of
"This would be Fonterra's third farm hub in
and will complement our existing farming operations in
and Hebei Provinces that have been very successful," said
, chief executive, Fonterra. "Farming hubs are a key part of our strategy to be a more integrated dairy business in
, contribute to the growth and development of the local Chinese dairy industry, and help meet local consumers' needs for safe, nutritious dairy products."
"We're pleased to partner with Fonterra, a global leader in dairy science, on this alliance to build dairy capacity in
Miles D. White
, chairman and chief executive officer, Abbott. "This is a very important step in our growing commitment to Chinese consumers."
Both companies will work with Chinese regulators to obtain necessary approvals through the course of the project's development.
If approved, Abbott and Fonterra will form a joint venture to invest a combined
(NZ$342 million or
1.8 billion RMB
) into the farm hub, which will contain up to five dairy farms and more than 16,000 dairy milking cattle in production, producing up to 160 million liters of milk annually. The herd for this hub will comprise animals either imported, or sourced from Fonterra's existing farm hubs. All dairy cattle will have genetics traceable to
the United States
As the world's largest global milk processor and dairy exporter, Fonterra brings industry-leading dairy standards and practices to farm operations. The Fonterra-Abbott joint venture will operate the farm hub in
to these same standards to produce high-quality dairy.
Pending regulatory approval, the first farm is expected to be completed and producing milk in the first half of 2017 and the remaining farms will commence production in 2018.