Fonterra is investing $US40 million in developing its third dairy farm in China.
The 40-hectare property in Yutian county east of Beijing will milk 3200 cows and is expected to boost Fonterra's fresh milk production in China to 90 million litres a year.
Fonterra International Farming Ventures chief operating officer Peter Moore says the development will be Fonterra's biggest investment in China.
Mr Moore says construction of the new farm will start in November, and should be completed by late next year.
He says Fonterra will train and employ about 100 people to run the farm.
Fonterra plans to sell high quality milk from the farm to leading local and international brands in China.