Fonterra may consider setting up its own company in China as it deals with the aftermath of a toxic milk crisis.
Chairman Henry van der Heyden told Nine to Noon on Monday that's among the options being considered as it looks to rebuild its business there following the loss of its investment in its SanLu joint venture.
SanLu was one of more than 30 Chinese dairy companies implicated in the scandal in which toxic baby formula and milk powder was contaminated by melamine.
The company, which has not resumed trading, is to be sold, and Fonterra expects to write off the whole of its $200 million interest in SanLu. Fonterra has a 43% holding in the group.
Mr van der Heyden said Fonterra was committed to staying in China, but it had not yet made a decision on whether to set up its own company there.
He said guaranteeing the quality of the milk supply right from the farm is the big lesson that Fonterra has taken from the contaminated milk episode.