New Zealand Dairy Industry Expands in China Amid Rising Demand and Strategic Cooperation
Source: The DairyNews
As China continues to be New Zealand's top destination for milk powder exports, the New Zealand dairy industry is actively seeking to broaden its market reach within China due to the country's growing and diverse consumer demands.
Fonterra, New Zealand's dairy giant, is spearheading this expansion. Teh-han Chow, CEO of Fonterra Greater China, emphasized the company's commitment to growing its presence, particularly in China's second- and third-tier cities. This expansion strategy includes enhancing product offerings through continuous innovation, menu development, and a focus on Chinese cuisine. The drive aligns with China's 'Healthy China 2030 initiative', a government campaign aimed at boosting public health, which has spurred increased demand for health and wellness solutions.
In 2023, Fonterra bolstered its capabilities by opening its fifth application center in Shenzhen and upgrading facilities in Shanghai and Beijing. Plans are underway to open a sixth center later this year, aiming to support local customers with product innovation.
Chow highlighted China's critical role in Fonterra's strategy, noting, "China is one of Fonterra’s most important strategic markets," a sentiment supported by both countries' commitment to strengthening economic ties. At a recent China Business Summit in Auckland, Prime Minister Christopher Luxon and Chinese Ambassador Wang Xiaolong both underscored the mutual benefits of robust bilateral relations and trade, which is vital for New Zealand's economy and supports a quarter of the country's jobs.
New Zealand Trade Minister Todd McClay also expressed confidence in New Zealand's reputation in China as a leading producer of safe and nutritious dairy products. Roy van den Hurk, CEO of Milk New Zealand Dairy Limited, added that New Zealand has become China’s largest source of imported dairy products, accounting for about 45 percent of China’s dairy import market share.
This relationship is bolstered by the China-New Zealand Free Trade Agreement (FTA), which allows zero tariffs on dairy products exported from New Zealand to China, paving the way for greater development within the dairy sector. Bilateral trade volume has seen a significant increase since the FTA's inception in 2008, reaching 38 billion NZ dollars (approximately 23.24 billion U.S. dollars).
Furthermore, the collaborative efforts between the two countries continue to grow, with significant investments such as the Yili Group's new lactoferrin plant in New Zealand, representing a landmark project in China-New Zealand dairy cooperation. Yili Group’s investments in New Zealand have reached about 1.5 billion NZ dollars (930 million U.S. dollars) since 2013, further solidifying the strong ties between the two nations in the dairy sector.
In 2023, Fonterra bolstered its capabilities by opening its fifth application center in Shenzhen and upgrading facilities in Shanghai and Beijing. Plans are underway to open a sixth center later this year, aiming to support local customers with product innovation.
Chow highlighted China's critical role in Fonterra's strategy, noting, "China is one of Fonterra’s most important strategic markets," a sentiment supported by both countries' commitment to strengthening economic ties. At a recent China Business Summit in Auckland, Prime Minister Christopher Luxon and Chinese Ambassador Wang Xiaolong both underscored the mutual benefits of robust bilateral relations and trade, which is vital for New Zealand's economy and supports a quarter of the country's jobs.
New Zealand Trade Minister Todd McClay also expressed confidence in New Zealand's reputation in China as a leading producer of safe and nutritious dairy products. Roy van den Hurk, CEO of Milk New Zealand Dairy Limited, added that New Zealand has become China’s largest source of imported dairy products, accounting for about 45 percent of China’s dairy import market share.
This relationship is bolstered by the China-New Zealand Free Trade Agreement (FTA), which allows zero tariffs on dairy products exported from New Zealand to China, paving the way for greater development within the dairy sector. Bilateral trade volume has seen a significant increase since the FTA's inception in 2008, reaching 38 billion NZ dollars (approximately 23.24 billion U.S. dollars).
Furthermore, the collaborative efforts between the two countries continue to grow, with significant investments such as the Yili Group's new lactoferrin plant in New Zealand, representing a landmark project in China-New Zealand dairy cooperation. Yili Group’s investments in New Zealand have reached about 1.5 billion NZ dollars (930 million U.S. dollars) since 2013, further solidifying the strong ties between the two nations in the dairy sector.
