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The Guangdong-based company's board signed off on a project to set up a manufacturing facility in New Zealand to process up to 52,000 tons of finished and semi-finished products including base milk powder by the second half of next year, according to a statement on the Hong Kong Stock Exchange. Yashili currently sources most of its raw milk from New Zealand.
The company will spend 950 million yuan on acquiring land and building the plant, and a further 150 million yuan as working capital for a New Zealand subsidiary.
The local unit, Yashili New Zealand Dairy Co, was incorporated in July last year according to Companies Office records and has entered into a conditional agreement to buy land where the facility will operate. The acquisition is subject to certain conditions, including approval from the Overseas Investment Office.
The investment comes a month after China's Yili Industrial Group based in Inner Mongolia flagged plans to spend some $214 million buying and upgrading Oceania Dairy Group's South Canterbury milk powder plant.
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