New Zealand dairy giant Fonterra and packaging and logistics firm A-ware Food Group have joined forces to set up two plants in the Netherlands.

The two firms have signed a memorandum of understanding to run cheese and dairy ingredient facilities in the country. Financial details and the planned locations of the plants were not disclosed.

Under the agreement, A-Ware Food, which stores, cuts and packages cheese at other sites, will operate the new planned cheese plant, which will be the first time it has manufactured the product.

“We are now set to take the next step in the manufacturing of cheese,” said CEO Jan Anker. “This will help us to expand our service offering with increased flexibility for our growing customer base in Europe. “As a family owned business, we aim to firmly anchor our business in the Dutch dairy industry and look forward to co-operating directly with Dutch dairy farmers in the future.”

A-Ware Food will also run the dairy ingredients facility alongside Fonterra. Whey and lactose produced onsite will be processed into premium nutritional ingredients to supply Fonterra’s customers throughout Europe and Asia, the New Zealand dairy firm said.

Fonterra CEO Theo Spierings said the proposed investment “fitted well” with the strategic priorities of both companies.

“We have substantial intellectual property in the manufacture of functional whey protein ingredients and have been looking for some time for a source of high-quality whey to enable us to commercialise these innovations for our customers around the world,” said Spierings.

“With our New Zealand milk business driving hard to optimise returns, we are producing more milk powders in New Zealand and therefore need alternative sources of whey to meet growth requirements. We also need more lactose for our global ingredient business. This partnership will give us greater access to both.”

The two companies will start due diligence on the plans, with a view to concluding the transaction later this year.

Fonterra opened a research and development centre in Amsterdam in July last year, in a move that concluded the migration of its European headquarters to Amsterdam.