The location of the second of Fonterra's planned Chinese dairy farming hubs has been confirmed, and is another step in the New Zealand company's journey to producing a billion litres of milk a year in China.
Fonterra's second farming hub, which when finished will have five 3000-cow farms, will be located in the Shanxi Province - south-west of Beijing.
Peter Moore is the general manager of Fonterra's international farming division.
He says Shanxi Province was chosen for the location of the second hub for a variety of reasons including enough feed for the cows, a reasonable climate for the cows and good relationships with local and provincial government that will support the investment in that area.
Mr Moore says Fonterra has a big emphasis on training and employing workers. There is also a small team of expatriates who ensure all the right systems and processes are in place.
But Mr Moore says three of the farms which Fonterra has operating in China at the moment have Chinese as the farm managers.
He says Fonterra expects it will eventually need six hubs of five farms - to produce that billion litres of milk.
It already has one hub in neighbouring Hebei Province.
Mr Moore says the environmental conditions for Fonterra's farms there are radically different to those in New Zealand.
Farms in the hub near Beijing had sweltering temperatures in summer and fell far below freezing in winter, which meant they relied on feedlot production.
Mr Moore says Fonterra puts a big emphasis on training and employing local Chinese to work on their farms.
The company farmer training programme runs in conjunction with China's Ministry of Agriculture - to help educate smaller dairy farmers about improving nutrition and milk quality.
While some attempted Chinese forays into New Zealand's dairy industry have been met with fierce opposition, Mr Moore says most local Chinese support Fonterra's presence.
They create jobs and opportunities for local farmers to grow maize for silage.
