NEW Zealand's Fonterra Group, the world's largest dairy exporter, has agreed to build a 200 million yuan (US$30 million) dairy farm in Yutian County in northern China's Hebei Province to expand local milk production. The new farm will be developed on 42 hectares of land, close to the existing Hangu farm, and its set up and management will also be similar to the latter. "We're committed to developing and investing in the local dairy industry over the long term," Fonterra CEO Andrew Ferrier said in a statement. "This new agreement will further strengthen our supply of fresh dairy products for Chinese consumers." Auckland-based Fonterra invested 144 million yuan to establish the Tangshan Fonterra Farm in Hangu in April 2007, with 15 percent of the capital coming from its partner, Sanlu Group. It was then the first dairy farm the group set up outside New Zealand. The Hangu farm now has more than 6,000 cows and produces around 25 million liters of milk each year for local consumption. The new farm, expected to start operations in November next year, will have around 3,000 milking cows imported from New Zealand.