2 June, 2008 - Dairy company Fonterra appears to be one of the first to reap the benefits of the recently signed Free Trade Agreement with China after closing a US$235 million deal with a Chinese firm, sources report.
The deal will reportedly see the New Zealand giant supply a multi-national customer with nutritional milk powders.
News of the agreement was said to be revealed by Philip Turner, the company’s manager of trade for Asia, to a New Zealand parliamentary committee.
He said the deal was “commercially very valuable” and came just weeks after the signing of the country’s Free Trade Agreement with China in April.
Turner was quoted as saying: “We've been able to conclude a deal recently on the basis of the FTA being signed, which results in a considerable volume of business and processing being done in New Zealand that would otherwise have gone offshore, in this case to Singapore.”
Fonterra said in its written submission to the committee the move would generate some NZ$300 million (US$235 million) by the end of 2012.
It added: These value-added dairy products will be manufactured in New Zealand factories, using New Zealand milk, capital, labour and technology.
"Without the FTA with China, lower-priced product from New Zealand would almost certainly have been processed offshore in Asia."
China is New Zealand’s fourth largest dairy export market.
Trade Minister Phil Goff said: "Fonterra's submission to Parliament, and its announcement of this deal only weeks after signature of the FTA, is further evidence of the value of that outcome to New Zealand."