As the world's largest food giant, Nestle recently has announced that it would invest in a dairy cow management training center in Shuangcheng, Heilongjiang, and it was just a part of its 2.5 billion yuan investment in Shuangcheng. According to the plan, the center will be equipped with three kinds of farms, including a "giant ranch" which can accommodate up to 8000 cattle. Nestle declared that the sites would be open for the whole dairy farming industry. As it is believed that China's milk supply can't keep up with the growth of the market, to establish a controllable milk base has become the focus of competition for dairy companies.
Although Nestle has not announced details of investment, the local government of Shuangcheng stated that the total amount of investment was about 180 million yuan. It seems that Shuangcheng is currently the biggest fresh milk supply base in China, where Nestle has 165000 cows.
The cost of local milk rose to 3000 ~ 4000 yuan per ton. And local officials have repeatedly proposed scale development of breeding. If the 200000 cows in Shuangcheng produces 2 tons of milk per year, the local output of Nestle can be doubled.
As part of 2.5 billion yuan investment commitment in Shuangcheng in five years, Nestle announced on June 6, 2014 to invest in a cow management training center covering an area of 600000 square meters.
It is said that the center will be equipped with three different sizes of demonstration farms, including a cow community of 1520 cows, a large farms of 1200 cattles and a very large farm of 8000 cattles.
Soubo, president of Nestle food and beverage department in greater China told us that the dairy industry should develop from retail investors to large-scale ranch, Nestle hopes to provide a steady supply of raw milk in China.
In January 2014 Nestle signed the memorandum of cooperation with Shuangcheng government, the memo is committed to turn Shuangcheng, one of the biggest fresh milk supply base for Nestle in China, into a demonstration base for dairy cattle breeding and management in the next five years, and Nestle will work with the local government, investors, and dairy farmers to drive the 2.5 billion yuan investment, promoting Shuangcheng dairy industry development.
The local officials of Shuangcheng said that the capital to buy fresh milk for Nestle is more than 1 billion yuan per year. Before this, Nestle has been mainly relied on retail breeding for milk, not becoming the direct owner of the ranch.