Nestle, Fonterra to milk Brazilian dairy demand

By Neil Merrett

- Last updated on GMT

Related tags: Milk production, Milk

Nestle has confirmed that it will work with New Zealand dairy
cooperative Fonterra in constructing and running a new dairy in
Brazil as part of a joint $40m (€27m) investment to step up raw
milk production in the country.

Nestle spokesperson Francois-Xavier Perroud told DairyReporter.com that on the back of strong demand for the group's dairy products within the country, extra capacity for milk production was vital for the group's operations. By working with Fonterra in a 50/50 joint venture, Perroud claims that the company can ensure more cost efficient milk production amidst growing international concern amongst dairy processors rega0rding tightening supply and higher costs for raw ingredients. "Though we remain one of the largest milk producers in the country, an extra supply is needed to meet demand,"​ he said. A report appearing on the Bloomberg.com website, which cited sources at Nestle, claims that the site will have an expected production capacity of 1m litres of milk a day, by the time it opens during the first six months of this year. Perroud said that there was no information presently available regarding a possible timeline for when the dairy is expected to become operational. While he was also not at liberty to confirm the exact capacity of the dairy, the spokesperson said that the venture would focus solely on primary milk production. Milk produced through the joint venture will then be sold back to Nestle for use in production of its own branded dairy and food products. Perroud added that the company's cooperation with Fonterra was not a new development, with the two parties cooperating in a number of Latin American ventures since 2000.

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