Dutch dairy giant eyes further success in China: CEO

Royal FrieslandCampina aims to build further success in China by establishing a joint venture with Huishan Dairy in China, Cees't Hart, chief executive of the top Dutch dairy company told Xinhua during an interview.

Describing Huishan as a "very good upstream" company in dairy industry, Hart considered it an opportunity to combine Huishan's upstream advantages with FrieslandCampina's technology to establish a second brand for the Dutch dairy giant in China in the future.

According to released information, the new joint venture will use Huishan's raw milk and the Dutch company's technology and management systems.

Hart said the Dutch side will tap into the Chinese partner's "professionalism in terms of farming," and add FrieslandCampina's "control mechanism and quality control professionalism" into the whole process, so as to ensure product's top quality.

"We feel that we can help Huishan and they can help us in order to set up a chain, which is no difference from the Dutch chain," he said. "The quote of 'from grass to glass' is as important for us here as it would be in China, because we are connecting our name to the chain."

The CEO said he is confident about the Dutch company's "from grass to glass" safety control system, which covers every part of the whole chain starting from the farm, including transportation, manufacture, and distribution.

"The mothers that feel that they want to have a product, which is controlled 'from grass to glass'. There are not that many companies that can help to see the entire chain," he stressed, "That's why we feel we can bring success in the Chinese market."

Since the dairy giant entered into Chinese market with its Friso brand baby formula five years ago, it grew there rapidly.

"We are aiming to have a turnover of one billion euros next year in China," he said, adding that FrieslandCampina has annual revenues of more than 11 billion euros (14.4 billion U.S. dollars).

The chief executive called China an "attractive" country from the market perspective, given the size and expected growth of the Chinese economy.

After the melamine scandal in 2008, Chinese consumers have become very sensitive to safety of infant formula. While now they can find Friso baby formula in China, some still prefer buying the brand's powder from Dutch market via different channels.

"Every country has its own food legislation. There are more than 60 ingredients that are been controlled by the Chinese government in terms of what the description of standards that the baby food products needs to response to," he said.

The CEO admitted there is difference between the recipe for the Netherlands and the recipe for China, emphasizing "The consumers are free to do what they want."

"We think it is easier to buy it in China" in the future, especially when the infant formula to be produced by the new joint venture in China will have a recipe tailored for Chinese babies. "In that respect, we feel that we bring the Friso to China, to cater to the needs of Chinese babies."

According to the CEO, the world's dairy product demand will see an enormous increase over the upcoming years.

"China is the most important market," Hart said, adding that from his perspective, nobody needs to worry about the investment environment in China.

"Wherever we are, we will work and manage our business in line with local regulations," he said.