Fonterra has formed a joint venture with multinational healthcare company Abbott which plans to invest $340 million in a new farm hub in China.
The plan needs Chinese regulatory approval which, if achieved, will mean it will be the New Zealand dairy co-operative's third farm hub in China supplying the local market there.
The group of farms is planned to include up to five dairy properties, running more than 16,000 cows and producing up to 160 million litres of milk annually. Fonterra produces 22 billion litres of milk a year.
If the plan gets regulatory approval, the partners plan for the first farm to be producing milk in the first half of 2017 and the remaining farms in 2018.
Fonterra and Abbott have previously worked together in China. Last year Abbott suffered from Fonterra's botulism scare because it sourced base product for its infant formula from the cooperative.
Fonterra's chief financial officer, Lukas Paravicini, says the two companies are moving on from last year's difficulties.