Inner Mongolia Yili Industrial Group Co, one of China's largest dairy producers, said Friday it will invest 2 billion yuan ($327 million) in four dairy projects in New Zealand.

Yili on Friday unveiled its Oceania production base in Waimate, South Island, New Zealand, which has received investment of 1.2 billion yuan.

The base, covering packaging, production, processing and R&D, is the largest integrated dairy production base in the world, according to Yili.

The move came as increasingly more Chinese customers prefer overseas dairy products as the reputation of local brands was damaged in the melamine-tainted baby formula scandal in 2008.

The second-phase investment will be four projects - a raw milk processing plant, a UHT milk plant, a milk powder plant and a packaging plant.

Also on Friday, Yili signed an agreement with Lincoln University of New Zealand to focus on research on how to improve nutrition and to ensure the quality of dairy products.