Kiwi dairy giant opens mega farms in China

SYDNEY - Thousands of Aussie and Kiwi dairy cows are being imported to China for use in a network of mega dairy farms that aims to produce one billion liters of fresh milk each year by 2020, local media reported on Wednesday.

New Zealand owned dairy giant Fonterra has opened a dairy hub milking 15,000 cows in China this year producing 150 million liters of milk annually, the ABC reported.

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The farm uses cows imported from Australia and New Zealand and has massive expansion plans in the pipeline.

Managing director of international farming at Fonterra, Henk Bles, said the company was already constructing the second hub in another area of China.

"We are starting with construction and the goal is that for next year, 2015, we also have 150 million liters produced over there," he said.

The hub cluster is made up of five farms milking between 3,000-3,500 cows, each employing about 100 workers at each farm.

Fonterra sells the milk to local manufacturers at a premium price because the company can assure food safety.

As a result, the dairy hubs have become a very profitable business.

"There is no one company who can just make those major investments without making profit," he said.

"There is a big need, a big demand, for high quality milk and they're paying us a big premium because the quality of the milk."