The dairy giant has pledged RMB2.5 billion (US$400 million) to be spent over five years with a focus on high quality and effective dairy farming methods using modern technology.
LianFang Chen, a senior analyst with Beijing Orient Agribusiness Consultant Ltd, hailed the move and said other dairy companies are likely to follow suit and better their milking techniques and processing operations.
Chen told FoodNavigator-Asia this move would uplift current standards of dairy farms in China.
“With improved techniques and knowledge for dairy farming there will be less chances for milk to become contaminated,” he said.
A spokesperson from the China Dairy Association agreed that Nestlé’s strategy would lead other dairy farms in China to upgrade their farming practices and improve their milk processing standards.
He said the transfer of sophisticated milking and milk farming technology would help dairy farms catch up with the rapid pace of development in the dairy industry in China.
It would also help alleviate current contemporary talent shortage in the dairy processing industry.
Quality and reliability
Roland Decorvet, chairman and CEO of Nestlé China, stated Nestlé’s aim is to transform Shuangcheng into a hub for quality and reliable fresh milk.
The aim is for the province to become China’s benchmark for best practice in dairy farming and management.
The institute also intends to create a dairy business partner platform, bring together worldwide experts in airy farming in feed and genetics.
In line with China’s 12th five-year plan for animal husbandry, the investment will also lead to a move to a large farm model, whereby farmers working alone or on small farms in the milk district will be relocated to a professionally managed farm. Larger farm owners will be assisted in the scale up of facilities and taught modern techniques.
Business enhancement
Chen said Nestlé would benefit due to longstanding “low price” arrangements with local farmers that could be maintained more easily with upgraded farms.
Nestlé began investments in Shuangcheng in 1987 that has since made it the largest milk district in China.
The world’s biggest food maker has been promoting large scale and modern dairy farming through free training and technical assistance, and has trained more than 7000 farmers in 2011, whilst spending RMB10 million (US$1.6 million) to purchase 1,000 sets of milking machines for farmers.