Fonterra opens dairy innovation centre in Shanghai

New Zealand multinational dairy co-operative Fonterra has opened a new innovation centre in Shanghai, China, to cater to the growing demand in the region.

The new centre will use Fonterra’s dairy protein research and development capability and aims to develop innovative dairy products and premium ingredients based on growing dairy consumption trends in China.

The co-operative also plans to expand its existing product line to address the changing lifestyles and consumer trends.

Fonterra CEO Theo Spierings said that developing innovative products is critical to the integrated milk business being built in China.

"China is a significant priority in Fonterra’s global strategy and our innovation centre will help us develop unique products and formats that suit the needs of the local population," Spierings added.

According to the co-operative, the centre will enable it to work closely with major customers and the foodservice industry.

The opening of the new centre comes after the Fonterra’s recent announcement to invest NZ$100m ($82.21m) to build two new large-scale dairy farms in Hebei province, China, as part of its plan to produce up to 1 billion litres of milk every year by 2020.

Earlier in May 2012, Fonterra said that it has expanded its senior management team and formed new business divisions to drive growth in emerging markets of China, India and Latin America.

According to the co-operative, milk consumption in China is expected to double to 70 billion litres by 2020. Fonterra entered into farming in China after its partnership with state-owned Sanlu fell apart in 2008.

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Image: Fonterra advisory chef Teoh Joo Cheong, right, shows Fonterra chief executive Theo Spierings, centre, and Fonterra China president Philip Turner, left, the new pastry and baking equipment in the Shanghai innovation centre. Photo: Fonterra Co-operative Group.