Wellington, June 27 NZPA - Fonterra has opened a new corporate headquarters for North America and a laboratory in Chicago.
The laboratory -- an application and sensory technical and development centre -- will be used to work more closely with North American customers developing products using NZ technology and ingredients.
Product innovations will be tailored specifically to the needs of Fonterra's customers operating in the US and Canadian markets.
"This move puts Fonterra closer to key customers, suppliers and centres of dairy research in an area that is one of the heartlands of dairying in the United States," said Fonterra chairman Henry van der Heyden.
Fonterra's US operations produce revenues of about $NZ2.67 ($NZ3.57) billion. The company runs a joint venture, DairiConcepts, with the largest dairy co-operative in the US, Dairy Farmers of America (DFA), to process milk from DFA members into milk protein concentrates -- increasingly used in chilled products such as dairy desserts -- and milkpowders and specialty ingredients. Fonterra also works closely with Dairy America, a group of nine US-based co-operative dairy companies, to export US-origin milk powder into the global marketplace.
Fonterra previously had a base in Harrisburg, Pennsylvania, but collected a $US1.14 million ($NZ1.5 million) investment package from the Illinois Department of Commerce and Economic Opportunity in the process of re-locating to Chicago.
Mr van der Heyden said the United States was a large and strategically important market and one where its business was growing. The new offices in Chicago have been home to around 50 employees since June 1, and this is expected to grow to more than 80.
The new Chicago centre would make it simpler and more effective to commercialise scientific innovations from Fonterra's research and development hubs in Palmerston North and Melbourne.
"Fonterra sees exciting opportunities in its US business and we want to grow it together with our key customers," said Fonterra USA's chief operating officer, Martin Bates.
"We also want to use the US as a supply base to allow us to work with our international customers to ensure quality exports are sourced from the US to meet growing international demand." More than 50 percent of the skim milkpowder sold by Fonterra internationally last year was manufactured in the US.
Fonterra chief executive Andrew Ferrier told Bloomberg.com "the US has good growth prospects".
"The US is increasingly becoming a supplier to the world market, so we look at this as an opportunity to invest," he said.
"If we want to be supplying customers around the world, we need a supply base in the US. It's definitely a focus for us."
The US market for fluid milk is the third-largest globally -- behind India and the EU -- and, according to US Department of Agriculture estimates, it could reach 27.5 million tonnes this year. In the US, Fonterra intends to continue making dairy ingredients, Mr Ferrier said.
"We will be concentrating on speciality ingredients, whether it's through high-end milk proteins or cheese flavours and so on," he said. "These are the areas we look at. We are trying to add value to milk."
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