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Fonterra develops more farms in China

New Zealand dairy co-operative Fonterra is developing two more large farms in China's Hebei Province as it seeks to be a player in local milk supply in China.

The two farms, located 120km east of Beijing on an 80ha site, will each have 3,350 cows producing up to 65 million litres of milk a year. The two farms will complete a "hub" of five farms in the province that will produce 150 million litres of milk a year.

The herd will be made up of China-born cows bred on Fonterra's other farms and supplemented by around 4,300 cows shipped from New Zealand, Nicola Morris, general manager of Fonterra China Farms said.

"The demand for dairy in China is expected to double by 2020 and much of this growth will be met from local production. We need to build a safe, sustainable local milk supply to feed this growth," Kelvin Wickham, president of Fonterra Greater China and India said.

The farms, which are expected to open in October 2013, are being facilitated by an investment agreement with Yutian County.

Fonterra, which is owned by 10,500 farmers, is the world's largest dairy exporter. It has revenue of $19.8 billion a year.