Fonterra is set to expand further into the Latin American market with a joint venture with Nestle, in Chile.
The 50:50 venture, which was formed in 2002, already operates in five other countries there, including Brazil, Argentina and Ecuador.
A Fonterra subsidary, Soprole, which already operates on a smaller scale in Chile, and Nestle have filed an application with Chilean authorities seeking approval for the venture.
If successful, Fonterra says the move will boost sales by approximately $770 million per year.
The joint venture in Chile will focus on accelerating the liquid and chilled dairy market.
The application is subject to approval by the Chilean competition authority, and could take as long as a year.
Federated Farmers says it's pleased to see Fonterra continuing to expand its business around the world.