Nestlé inks dairy farm plan for Inner Mongolia

By Ankush Chibber

- Last updated on GMT

Further dairy investments for Swiss giant Nestlé, this time Inner Mongolia...
Further dairy investments for Swiss giant Nestlé, this time Inner Mongolia...

Related tags Milk

The Swiss food and beverage firm, Nestlé, has inked a deal with a local government in China’s Inner Mongolia region to build and develop a new dairy farm, according to local media reports.

China’s state-owned official news agency Xinhua reported May 22 that the dairy giant had signed an a memorandum of understanding with the government of Old Barag Country to build a 2,000-cow dairy farm by 2013.

Nestlé will not have ownership of the farm but will manage operations, and it will be located near the Hulunbuir Grasslands where the firm built a dairy plant in 2007.

Nestlé could not be reached to confirm media reports at the time of publication.

The European dairy player runs another dairy farm in Inner Mongolia that collects fresh milk from some 25,000 farmers and herdsmen.  The company also runs dairy plants in the cities of Shuangcheng and Qingdao.

Investment tracks in China dairy

Nestlé recently pledged US$400m over the next five years to improve the quality of milk produced at the plant in Shuangcheng.

LianFang Chen, a senior analyst with Beijing Orient Agribusiness Consultant Ltd, had hailed the move and said other dairy companies are likely to follow suit and better their milking techniques and processing operations.

Chen told FoodNavigator­Asia this move would uplift current standards of dairy farms in China. “With improved techniques and knowledge for dairy farming there will be less chances for milk to become contaminated.”

Nestlé began investments in Shuangcheng in 1987 that has since made it the largest milk district in China.

The world’s biggest food maker has been promoting large scale and modern dairy farming through free training and technical assistance, and has trained more than 7000 farmers in 2011, whilst spending RMB10 million (US$1.6 million) to purchase 1,000 sets of milking machines for farmers.

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