China-based milk powder producer San Lu and New Zealand's dairy giant Fonterra are considering an initial public offering (IPO) for the Chinese joint venture, According to local news agency NZPA Thursday.

A Fonterra spokesman said a report from an interview the Fonterra CEO Ferrier gave recently in Singapore, in which he said the Chinese dairy company San Lu, "you may see outside capital coming in through an IPO."

Last month Fonterra won Chinese government approval for its 107 million U.S. dollars purchase of a 43 percent stake in San Lu.

Chinese statistics indicate annual consumption of dairy products there will reach 30 kg a person by 2015, about 13 times the consumption level last year.

An offering will also aid issues of remuneration and stock options as well as realign the business model to focus on the commercial aspects.

Ferrier told Xinhua in an interview that his "first priority was to develop a close working relationship with San Lu's management."

Fonterra is a global exporter of dairy commodities. Annual sales stand at about 7.7 billion U.S. dollars. San Lu, which has a distribution network in 600 Chinese cities, reported sales of 925 million U.S. dollars last year.

Source: Xinhua