Fonterra and China

April 24th, 2012

CQ News has a tiny, little report on Fonterra’s plans for investing in China. There’s not a lot in it, but there are some impressive numbers. A quick summary (which is really all the original article is, anyway): Apparently Fonterra plans to build safe, high-quality local milk supply bases with a goal of producing 1 billion litres of milk annually by 2020. Fonterra currently has two farms in Hebei and a third under construction and in the future will invest 100 million New Zealand dollars to build two more. China’s milk consumption is projected to reach 70 billion litres annually by 2020.

So, my cynical side is thinking, great, it’s not just New Zealand’s lowland waterways that Fonterra is threatening to clog with cowshit. But I’m also looking at those numbers, and although I should be well used to seeing staggering numbers by now, those are still mindblowing.

But wait, Fonterra wants only 1/70 of the Chinese milk market in 2020? Really? Well, “high-quality” appears repeatedly in every article I ever read about Kiwi involvement in Chinese dairy, weather its selling cows to produce better milk, or building farms and production bases. And I noticed the word “safe” taking a fairly prominent place early in that article. So is it more that Fonterra is aiming for the very top end of the market rather than a complete takeover?

And is Fonterra trying with its Chinese name “恒天然” to claim to be “permanently natural”? Greenwashing built right into the name? Well, considering all the marketing their Chinese partners do plays up the ‘clean, green New Zealand’ angle for all its worth, I wouldn’t be surprised.

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