Fonterra plans to double China sales by 2020

New Zealand multinational dairy cooperative Fonterra plans to double its sales in China by 2020, after the melamine-tainted milk scandal in 2008 led to the bankruptcy of its local partner Sanlu.

Fonterra CEO Theo Spierings said the company intends to boost the sales in China’s dairy market and aims to increase in value by more than 10% a year over the next few years.

"Supply is also growing in China, but supply will not be able to cope with demand," he added.

Fonterra plans to increase its sales through both imports and the expansion of local milk production.

In July, the company announced its plans to build a state-of-the-art farm in Hebei province, which will increase its milk production in China to nearly 90 million litres annually.

The company also plans to set up a fully integrated model in China in order to hold complete control of the supply chain, to ensure food safety.

According to the company, the demand of New Zealand milk products has grown more than five times from 2008 to 353 million tons in 2010.