New Zealand dairy group Fonterra has signed a deal worth over NZ$300m (US$236m) to supply nutritional milk powders to a customer in China.

The deal was revealed by Philip Turner, Fonterra’s general manager of trade for Asia, at a parliamentary hearing on New Zealand’s recently-signed Free Trade Agreement (FTA) with China.

Fonterra declined to reveal the name of the new client but said it was a “large multinational”. The FTA played a major role in securing the contract, as tariffs on nutritional milk powders will be eliminated by 2012.

“These value-add dairy products will be manufactured in NZ factories using NZ milk, capital, labour and technology. Without the FTA with China, lower-priced product from NZ would almost certainly have been processed offshore in Asia,” said Turner in his submission to the hearing, seen by just-food.

The deal came within weeks of the signing of the FTA, which will come into effect on 1 October.

Fonterra’s China revenue currently totals NZ$450m, including ingredient exports and sales through its joint venture.