China-based Modern Dairy, CDH Investments and global investment firm KKR have formed a new joint venture (JV) for the supply of raw milk to consumers across the country.
KKR, CDH and Modern Dairy will own 61.5%, 20.5% and 18% stakes in the JV.
As per the agreed terms, the JV will invest around $140m over the next 18 months for the development of the dairy farms in Shanghe county of Eastern China's Shandong province over a two-year period.
The new farms, which will have 10,000 cows each, will purchase Modern Dairy's excess cows generated through natural herd growth. Modern Dairy has the option buy back the JV farms in three years, which will boost its long term growth.
Modern Dairy CEO Gao Lina said that the growing demand for premium dairy products is driving strong demand for high quality milk from large scale farms.
"Following our successful partnership in Modern Dairy, we have chosen once again to partner with KKR and CDH in a new venture to help meet Chinese demand for safe and high quality milk," added Lina.
KKR, CDH and Modern Dairy will own 61.5%, 20.5% and 18% stakes in the JV.
As per the agreed terms, the JV will invest around $140m over the next 18 months for the development of the dairy farms in Shanghe county of Eastern China's Shandong province over a two-year period.
The new farms, which will have 10,000 cows each, will purchase Modern Dairy's excess cows generated through natural herd growth. Modern Dairy has the option buy back the JV farms in three years, which will boost its long term growth.
Modern Dairy CEO Gao Lina said that the growing demand for premium dairy products is driving strong demand for high quality milk from large scale farms.
"Following our successful partnership in Modern Dairy, we have chosen once again to partner with KKR and CDH in a new venture to help meet Chinese demand for safe and high quality milk," added Lina.
