New Zealand-based dairy co-operative Fonterra has agreed to develop a dairy farm hub in China, under a partnership with Abbott Laboratories.

Both the partners plan to form a joint venture (JV) and invest around $300m in the proposed dairy hub. The JV will be formed after receiving the Chinese regulatory approval for the facility.

Abbott Laboratories chairman and chief executive officer Miles White said that Abbott is pleased to partner with Fonterra, a global leader in dairy science, on this alliance to build dairy capacity in China.

"This is a very important step in our growing commitment to Chinese consumers," added White.

The dairy facility is anticipated to produce approximately 160 million litres of milk every year. It will house around five dairy farms and will have more than 16,000 dairy milking cattle in production.

According to Fonterra, the first one of the five farms will commence milk production in the first half of 2017 and the remaining farms will become operational in 2018.

Fonterra chief executive Theo Spierings said farming hubs contribute to the growth and development of the local Chinese dairy industry and help meet local consumers’ needs for safe, nutritious dairy products.

"This would be Fonterra’s third farm hub in China and will complement our existing farming operations in Shanxi and Hebei Provinces that have been very successful," Spierings added.