Fonterra Co-operative Group plans to spend $100 million building two more farms in China's Hebei Province.
Chief executive Theo Spierings said the dairy exporter wanted to set up an integrated milk business in China as it sought to tap into the growing middle-class demand for high-protein food.
Speaking at the opening of Fonterra's second farm in Yutian County, Spierings said the extra two farms would create the first hub in the country with about 15,000 milking cows producing 150 million litres a year.
The announcement coincided with the appointment of Craigs Investment Partners as market-makers for the forthcoming tradeable Fonterra units under the Trading Among Farmers initiative.
"Our intention is to develop separate farming hubs across China, with the ultimate goal of producing up to one billion litres of high-quality milk every year by 2020," Spierings said.