Why would a global healthcare company join forces with the world’s most prominent dairy exporter to build dairy farms in China? Good question.

But, that’s what’s happening, according to a joint press release issued by the companies, Fonterra and Abbott. The dairy “hub” as the farm is termed by Fonterra, would include joint investment of $300 million for 5 dairy farms and 16,000 head, producing up to 160 million liters (over 350 million pounds) of milk yearly.

The companies say the joint venture utilizes Abbott’s commitment to business development with Fonterra’s expertise in dairy nutrition and farming in China.

Pending regulatory approval, the first farm would begin producing milk in 2017, with the other for farms starting in 2018. Fonterra said cattle will come from genetics sourced from New Zealand, Australia, the U.S. or the E.U.

Health company joins Fonterra for interesting China partnershipFonterra currently has hubs in Shanxi and Hebei Provinces, two regions that neighbor each other about 6 hours by car southwest of Beijing, or 16 hours northwest of Shanghai. The new hub’s location was not named in the release.

Source: The Wall Street Journal