Wellington - Russia's biggest manufacturer of baby foods, Nutritek, has become the first foreign firm to take over a dairy company in New Zealand, which is the world's biggest international trader in milk products, according to news reports on Monday.

Nutritek has increased its stake in New Zealand Dairies Limited from nearly 6 per cent to more than 51 per cent and says it has agreements to buy another 25 per cent.

The New Zealand government last month rubber stamped the Overseas Investment Office's approval for Nutritek to acquire up to 100 per cent of the company over the next 12 months.

New Zealand Dairies is an independent company founded by a group of South Island farmers and investors to make milk powder for export in competition with the giant Fonterra Co-operative Group, which is the world's biggest single exporter of dairy products.

Nutritek's Singapore-based subsidiary bailed out the company last year when it ran into financial difficulties while still building its processing factory at Studholme, South Canterbury.

The takeover was criticized by the nationalist New Zealand First party, which saw it as the first move in a campaign by overseas interests to infiltrate the dairy industry which is the country's biggest single export earner. (dpa)