Australian dairy company Bonlac Foods has said it is in talks with New Zealand dairy cooperative Fonterra regarding the future of the company following the collapse of merger talks with Murray Goulburn.

Bonlac Chairman Noel Campbell said the company has been "actively exploring a range of strategic alternatives" to boost shareholder returns, reported Dow Jones International News.

"Our debt reduction strategy and the significant restructure of the business have strengthened our balance sheet and positioned the company to pursue a range of options for its future," he said.

Campbell also said that Fonterra has reaffirmed its bid to increase its presence in the Australian dairy ingredients industry.

"We are very pleased at Fonterra's willingness and enthusiasm to discuss various structural strategies with us to achieve our objectives," he added.