Chinese dairy farm Synutra International Inc. has set up a large milk factory in France that can export more than 100,000 tons of dried milk to China annually.

Synutra, one of China's top baby formula makers, bought 37 acres of land in Charhaix in Brittany, France to house its new overseas dairy plant.

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Charhaix Mayor Christian Troadec said the sale of the property to the Chinese milk  company would revive his sleepy town and provide employment to hundreds of dairy farmers.

Synutra is pouring in 90 Million Euro (US$125 million) to build its dairy plant in Charhaix, the first Chinese-owned dairy company on French soil, and forecast to become the largest milk-drying factory in the region.

It will absorb 100 cheese factory workers at a French dairy plant that is closing down next year, and another 150 dairy farmers in the region.

The purchase deal took three years to close, with executives of the Chinese milk company traveling to Charhaix four times a year.

This early, Mayor Troadec is already looking to sell another 49 acres of land to the Chinese dairy company in case it needs to expand.

France's Brittany region is known for its top-quality milk, one of the best milk sources in the world, but its economy has not seen much expansion because its dairy produce has been mainly available for domestic consumption.

On the other hand, China's dairy industry has not been doing well since 2008 when baby formula products were found to contain melamine, an unsafe additive that seemingly increases the protein content of milk.

The resulting low consumer confidence has prompted several Chinese dairy companies to relocate abroad and partner with overseas milk producers.

Meantime, the French government has actively courted investments from China to revive its moribund economy, even offering a takeover of French companies by Chinese investors.

But not everyone in Brittany is happy about the Synutra-Charhaix deal.  Many French dairy farmers are worried that China may soon dictate the prices of milk.

Synutra has partnered with Sodiaal, the French dairy cooperative, to gain access to the entire 300,000 million liters of milk produce from Charhaix, along with 30,000 tons of whey, for immediate shipment to China