Nestle to build dairy farm in Inner Mongolia

HOHHOT - Swiss food and beverage giant Nestle has signed an agreement with a county government in north China's Inner Mongolia autonomous region to build a new dairy farm in the area.

The government of Old Barag Banner (county) confirmed on Tuesday that it has signed a memorandum of understanding with Nestle to build a 2,000-cow dairy farm by the end of 2013.

The county is located near the Hulunbuir grasslands, where Nestle built a dairy plant in Ergun Banner in 2007.

According to the agreement, Nestle will not have ownership of the farm, but will help the owners manage it.

The company collects fresh milk from some 25,000 farmers and herdsmen on its farm in Ergun to use in its products.

Nestle has dairy plants in the cities of Shuangcheng and Qingdao in addition to its farms in Inner Mongolia. The company announced in January that it would spend 2.5 billion yuan ($395 million) over the next five years to train managers and improve the quality of the milk produced at the plant in Shuangcheng.