Inner Mongolia Yili Industrial Group, a China-based dairy company, plans to invest $214m to set up an infant formula facility in South Canterbury and as part of this strategy, it is set to buy New Zealand-based Oceania Dairy Group.
Oceania will allow Yili to gain acess to the land resource consents. The facility will be set up on a 38 hectare land. Construction work is expected to complete by June 2014.
The dairy facility will initially have a 60% production capacity and will achieve full production capacity of 47,000 tons by 2016-17.
New Zealand's Overseas Investment Office and Chinese regulatory authorities have to approve the acquisition.
Yili announced that it is planning to invest in New Zealand because of the availability of relatively cheap raw milk and the prospect of the free-trade agreement with China, which will see removal of import tariffs by 2020.
