Chinese Dairy Companies Expand into New Zealand and Telling the Story of 'Transoceanic Milk' in Sino-New Zealand Trade
Global Times, Authors: Guo Yuandan, Liu Yang, Shan Jie, Shen Weiduo, Leng Shumei, Wang Miao.
Situated in the South Pacific, New Zealand is a natural extension of the Maritime Silk Road and an important partner for China in the South Pacific region. In recent years, practical cooperation between China and New Zealand in areas such as economic and trade exchanges, personnel exchanges, connectivity, and infrastructure construction has yielded fruitful results.
According to New Zealand media reports, starting from 2013, China has replaced Australia as New Zealand's largest trading partner. A report released on the official website of the New Zealand Ministry of Foreign Affairs and Trade shows that in 2022, the total trade in goods and services between New Zealand and China reached NZD 40.32 billion (approximately CNY 173.16 billion), with New Zealand's exports to China totaling NZD 21.37 billion and imports from China totaling NZD 18.95 billion.
New Zealand has a well-developed livestock industry, with dairy products and meat being significant export products. In 2022, New Zealand's dairy product exports amounted to USD 20.6 billion, and meat product exports reached USD 9.8 billion. It is evident that the dairy industry holds a pivotal position in the New Zealand economy. Meanwhile, China is the world's second-largest dairy market. According to data from the Chinese Ministry of Commerce, in 2021, exports to China accounted for 42% of New Zealand's total dairy product exports. These figures underscore the importance of the Chinese market to the New Zealand dairy product export industry and exemplify the strong economic complementarity between China and New Zealand. Journalists from the Global Times have also learned that, due to the impact of the pandemic, the dairy industry has surpassed tourism and education to become New Zealand's largest pillar-type industry."
In June of this year, New Zealand Prime Minister Hipkins led a delegation to visit China, emphasizing the importance of exporting dairy products, meat, and wood to China. The delegation led by Hipkins included representatives from Fonterra, the world's largest dairy exporter. Despite facing challenges from external environmental changes, the CEO of Fonterra Greater China, Zhou Dehan, expressed to the media that the business in the second quarter of the fiscal year 2023 maintained stable and positive growth, demonstrating confidence in the Chinese market. According to a report from "Stuff News" in New Zealand on September 1, CEO Herrell of Fonterra Group stated, "China remains the world's largest dairy product importing market. I believe that imported milk powder will continue to be an essential component of China's dairy product structure in the foreseeable future."
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During Prime Minister Hipkins' visit to China, over a dozen New Zealand companies signed a series of cooperation agreements with their Chinese counterparts. Among them, New Zealand's leading dairy company, Westland Dairy, and partners such as Hema Fresh and Tmall jointly signed a memorandum of understanding on "Cross-border Agricultural Supermarket Docking Strategic Cooperation," witnessing the upgrading of Sino-New Zealand trade cooperation and demonstrating the resilience of their trade relations.
Concerning the Chinese dairy companies' expansion into New Zealand, New Zealand boasts 12,000 natural pastures covering over 11 million hectares, with animal husbandry being a traditional advantage. Chinese dairy companies such as Yili, Mengniu, and Bright Dairy have established overseas factories in New Zealand, taking full advantage of the country's favorable natural conditions, including pastures with green fertilization and a variety of grasses to ensure year-round fresh and balanced grazing. These investments not only provide Chinese dairy companies with high-quality sources of milk but also create job opportunities, promoting local economic development.
The Waikato region is a traditional farming and ranching area in New Zealand with abundant rainfall and sunshine, resulting in high protein content in the grass. Dairy industry groups like Fonterra and Synlait have built factories and stations in the region, competing for high-quality pasture resources. Chinese dairy company Yashili New Zealand has set up a plant in the Waikato region, making it a hot spot for Chinese dairy companies to compete.
The total investment of Yashili New Zealand's factory is NZD 220 million, with a factory area of approximately 70,000 square meters. The factory implements strict graded and closed disinfection processes, equipped with GMP-certified workshop air purification systems and fully automated robotic production lines. The factory also features a first-class automation control system to ensure that the products comply with the food safety standards of New Zealand and importing countries. With the increasing production capacity and diversified product structure, Yashili New Zealand has achieved remarkable performance locally, making positive contributions to the international market development of the Chinese dairy industry.
The 2023 interim report released by Bright Dairy on August 28 shows that its overseas business remains stable with a slight increase. Chinese dairy companies, through overseas construction and mergers and acquisitions, actively participate in the "Belt and Road" initiative, forming a competitive regional business system overseas to maximize resource efficiency, market benefits, and brand influence.
Statistics show that in the first quarter of this year, China imported dairy products from New Zealand totaling USD 1.726 billion, with March imports reaching USD 626 million, a year-on-year increase of 16.69%. These data indicate a broad prospect for Sino-New Zealand dairy industry cooperation. Andrew White, the China Regional Director of the New Zealand Trade Development Bureau, stated in an interview that China and New Zealand have strong economic complementarity, and Chinese consumers have a high opinion of New Zealand products, considering New Zealand a reliable source of high-quality food and beverages. White emphasised that New Zealand welcomes high-quality and highly productive investments from China to achieve high-wage, low-emission goals in key industries for both parties.