US-based Land O’Lakes, Inc and Netherlands-based Royal Agrifirm Group announced the joint venture focused on the dairy feed market in China on Monday [June 24.] The two businesses are set to form the joint venture company Agrilakes.
The project with Agrifirm group was of interest because the joint venture is a way to expand the cooperative’s strategy on international commercial growth, said Jerry Kaminski, executive vice president and chief operating officer of Land O’Lakes, Inc. That plan involves partnering with companies that demonstrate local success.
“In this case, Agrifirm – a cooperative that brings two decades of experience working in China,” he told FeedNavigator. “Agrifirm will be an outstanding partner in this effort.”
Both Land O’Lakes and Agrifirm also share a business model as both are cooperatives, he added.
Expanding Land O’Lakes’ efforts in China are both part of the company’s international growth plan and a way to provide support for a growing market, he said. Adding, “China is a promising market for dairy animal nutrition, as its dairy farms continue to become more sophisticated, fueling demand for enhanced animal feed and nutrition that we aim to help meet.”
“This new joint venture is exciting for Land O’Lakes because it aims to build our business footprint in China,” Kaminski said. “The Agrilakes joint venture will serve a promising market and build on work we have already done to help build capacity in the Chinese dairy sector through our training and technical assistance efforts.”
Joint venture and the focus on China
The new company is expected to build off of the research capabilities, market understanding, insights and technology that both cooperatives have developed to support dairy producers and feed users in China, Land O’Lakes said.
The project melds Agrifirms’ presence and infrastructure in China with Land O’Lakes’ research and technology and is anticipated to help expand both firms, the cooperative said. AgriFirm’s presence in the country includes its work with subsidiary Nuscience, which operates two premix and young animal nutrition production plants and a business unit dedicated to feed and feed additive sales.
In addition to experience, Agrifirm also has existing infrastructure in China, including a manufacturing plant in Tianjin, said Kaminski.
“Agrilakes will initially be based at the existing manufacturing plant in Tianjin,” said Kaminski. “We also plan to move ahead with a new dairy premix and specialty plant on the adjacent property, working together.”
The exact timeline for the building product is not available at this time, the cooperative added. However, details about the project and production of specific products at the facility are set to be shared in the future.
Boards of Directors with both cooperatives have approved the development of, and funding for, the Agrilakes joint venture, Land O’Lakes reported. However, the project is still pending the required anti-trust and regulatory approvals.
Previously, Land O’Lakes had been involved in China through the work of subsidiary businesses including Purina Animal Nutrition and WinField United. The cooperative also runs a training facility in China – the Dairy Farming Institute – in a partnership with Nestle.
“China’s dairy production sector is rapidly evolving and expanding and driving new demand that we want to help meet through this new joint venture,” said Kaminski. “Dairy farms in the region are increasing in their sophistication, productivity and efficiency, and that’s creating demand for more advanced animal nutrition offerings.”