Dairy Farmers of America, the US dairy co-op, and Chinese dairy giant Inner Mongolia Yili Industrial Group Co. have agreed to set up a milk powder joint venture.

The companies revealed plans for a “strategic alliance” last summer and hinted at the prospect of establishing ventures along the supply chain.

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In a statement to the Shanghai Stock Exchange on Wednesday (12 November), Yili said the two sides had decided to establish a milk powder plant in Kansas.

The factory will have an annual output of 80,000 tonnes of milk powder.

The companies are putting a combined US$100m into the venture. DFA will plough $70m into the business – giving it a 70% stake – with Yili putting up the other $30m.

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