Fonterra is planning to open two more farms in China, an investment that would give it five in what is a fast-growing dairy market.

The New Zealand dairy giant, which has two farms in China and is building a third, is looking to produce up to 1bn litres of milk every year in the country by 2020.

The fourth and fifth farms will be in the north-eastern province of Hebei, where Fonterra’s two current sites are and where it is building its third.

Fonterra opened its first dairy farm in the city of Tangshan in 2007 and, speaking today at the official opening of the second site, CEO Theo Spierings outlined the company’s plans for China.

“We want to establish an integrated milk business in China that processes high quality milk from Chinese farms into dairy nutrition for Chinese customers and consumers,” he said. “Our first farm in Tangshan opened in 2007 and today we are celebrating the official opening of our second farm in the area. Construction of our third farm is underway and today we are also announcing that we will be investing NZ$100m (US$82.1m) in a further two farms in the same province.

He added: “This will mean we will have a hub with five farms within the area. Combined, they will have a herd size of around 15,000 milking cows producing 150m litres a year and all nearby a large market like Beijing.”