CHINA – Fonterra, a global dairy giant, has announced plans to open its sixth application center in China, located in Wuhan.

Construction of the new facility, which will join the existing centers in Beijing, Chengdu, Guangzhou, Shanghai, and Shenzhen, is underway.

CEO Miles Hurrell emphasized the importance of the ‘Greater China Foodservice business in Fonterra’s value-add strategy. He highlighted the significant role of the Waitoa UHT site cream products in driving this success.

Our foodservice whipping cream is used in approximately 400 million beverages and 260 million cakes in Chinese bakery stores each year, with demand continuing to rise since 2014,” Hurrell stated.

China’s economic growth has fueled increasing demand for our high-quality dairy ingredients and expanded our food service business in China.”

The decision to open the center was announced during the company’s celebration for the 10th anniversary of two key sites in Fonterra’s food service business.

In 2014, the company inaugurated its Waitoa UHT manufacturing site in Waikato, specializing in high-value cream products.

The same year, Fonterra’s first application center in Shanghai opened. This center has been instrumental in partnering with local customers and developing products tailored to local consumer preferences.

“The formula for our food service whipping cream, developed by our team at Fonterra’s Research and Development Centre in Palmerston North, exemplifies our innovative approach to adding value to farmers’ milk,” Hurrell noted.

“The new application center in Wuhan is expected to boost our Greater China Foodservice business further, leading to increased demand for our cream products, which we are well-prepared to meet.”

In the fiscal year 2023, Fonterra’s Greater China Foodservice business reported US$2.2 billion in revenue with gross margins of 17.9%.

Teh-han Chow, CEO of Fonterra’s Greater China, pointed out that combining high-quality products and local expertise from the application centers gives Fonterra a competitive edge in the Chinese market.

“While our food service business in China is already robust, we aim to continue growing. Collaborating closely with customers to create product applications that enhance their businesses allows us all to benefit from the opportunities in the Chinese market.”

Fonterra’s food service business is also expanding in Southeast Asia, particularly in the bakery sector, with the rise of specialty bakery and lifestyle cafes. Like China, local chefs in these markets assist in developing new applications based on consumer needs

Subscribe to our food and agriculture industry email newsletters that provide busy executives like you with the latest news insights and trends from Africa and the World. SUBSCRIBE HERE