With demand of milk outstripping supply among aspiring middle classes in China, Asia and Latin America, the Fonterra company has formulated a strategy to invest overseas to expand its footprint. Sharing details of its "Group Strategy Refresh", which aims to grow volumes and value by focusing more tightly on emerging markets and products that meet growing consumer demand for dairy nutrition, Spierings said.
"Strong economic and population growth in emerging markets is driving a situation where global demand for milk is forecast to grow by more than 100 billion litres by 2020, with New Zealand expected to contribute only 5 billion litres of additional supply by that date," he said.
Stressing on raising volumes to protect its position as the world's leading dairy exporter, the company has charted over 100 projects - many of which are already underway. World's largest dairy exporter Fonterra Cooperative Group Ltd. is planning overseas expansion to focus more strongly on fast growing markets in China, ASEAN, Latin America, Middle East and Africa. Fonterra already has established businesses in these regions, so it is a case of really building on these and driving growth with greater intensity, Fonterra chief executive Theo Spierings said Thursday releasing the interim results.
Spierings said global dairy prices remained relatively strong despite a recent slide as more milk production by rivals reached markets.