Fonterra sets up Shanghai innovation center

WELLINGTON - New Zealand-based Fonterra, the world's biggest dairy company, announced Monday it is to develop unique products for the booming Chinese market at new innovation center in Shanghai.

The development of innovative products designed to meet the needs of Chinese consumers was critical to the integrated milk business the company was building in China, Fonterra chief executive officer Theo Spierings said at the opening, according to a statement issued by Fonterra.

"Demand for dairy nutrition is expected to double by 2020 and the way people consume dairy will change. The opening of the state-of-the-art Shanghai Innovation Centre will help us build and grow beyond our current product and ingredient offerings and better meet the needs of local Chinese consumers and customers," Spierings said.

"China is a significant priority in Fonterra's global strategy and our innovation center will help us develop unique products and formats that suit the needs of the local population," he said.

"As incomes rise across China, people are looking for nutrition that supports the health of their families, particularly young children, and dairy is one of the most nutritious foods there is. People's lives are also becoming busier, which means they're often looking for dairy products that they can eat on the go or use to make quick, easy and nutritious meals."

Fonterra China president Phillip Turner said the Shanghai Innovation Centre would allow Fonterra to work more closely with major customers and the foodservice industry, and carry out product training courses for major customers.

Turner said in the statement that the center would employ local staff trained in product formulation, product production, operating procedures and food safety systems.

Last month, Fonterra announced plans to develop two new large dairy farms in north China's Hebei province as part of a series of "farming hubs" across China, with the ultimate goal of producing up to 1 billion liters of high quality milk every year by 2020.

Fonterra had already committed investment to five farms in the Hebei province.

In March, Fonterra announced it would target emerging markets, with a particular emphasis on China, and drive growth with greater intensity.

Fonterra is the largest processor of milk in the world, producing more than 2 million tons of dairy ingredients and products every year, and employing more than 16,000 people.