We operate our dairy farming business under New Zealand Farming Systems Uruguay (NZFSU), a company we own a majority share of. NZFSU currently operates 32 Dairy farms, and as of May 2010, manages close to 34,000 hectares of land and 58,000 head of cattle, 34,000 of which are milking cows. It has plans to extend this scope to 50 farms by 2012.
Through NZFSU, we presently sell all our milk on an exclusive basis to Conaprole. Having invested more than USD 200 million into the business, we are expecting to increase our milk production by 90% in 2012 and by a further 40% to 60% in the following years. Our milk production is expected to stabilise at around 300 million litres annually.
With the success of NZFSU, we plan to extend our milk business across other geographies where a significant supply of good quality milk in required, not only to meet increasing demand but also to provide better quality and traceability.
Dairy Farming – Russia
Russia is a large market for dairy farming and Olam’s partnership with RUSMOLCO is aligned with its dairy strategy to selectively invest in attractive value chain that provides a potential for profitable growth.Russia has strong demand for dairy creating an increasing demand-supply gap. It is currently one of the world’s largest milk importers.
RUSMOLCO has a robust dairy farming platform and together with Olam, will develop increase its involvement by investing in expansion, farm upgrades to international standards and the implementation of best practice farming programmes. In the first phase of expansion over 4 – 5 years, RUSMOLCO will construct four new dairy farms, increasing the milking cow population from the current 3,600 heads to 20,000 heads.