Cheese giant Saputo Inc. is making a major investment in its Argentine dairy operation, so it can extract more value from cheese products, chief executive Lino Saputo said in an interview.

Saputo said the investment in the Argentine dairy, acquired in late 2003, is part of the company's plans to expand the Montreal-based dairy into an international powerhouse, mainly through acquisitions.

Saputo, who took over management of the business from his father, Lino, last year, said the company's main focus is in the U.S., but he is looking in Europe and even Australia.

"I think the opportunities are limitless," said Saputo.

"If you look on a worldwide dairy scale, we're in the top 20," he continued. "There are some large companies out there, but there are still some very small, fragmented players. So, we believe there's still a huge opportunity for us to grow our business, either organically but mostly through acquisitions."

Saputo said the U.S. industry in particular remains open to consolidation. While a market leader in Canada, the Montreal company estimates its cheese market share in the U.S. is 6% or 7%.

"Based on information we have, we don't believe there's any one company that has more than 10% of the market share."

Saputo added he is very interested in Australia, while Europe, with its long dairy tradition, is becoming more attractive, as its agriculture subsidies drop along with tariffs and quotas.

Saputo's dairy in Argentina, the country's third-largest, already exports 60% of its products.

One change under the $30 million investment in Argentina is to be able to convert liquid whey into higher-valued powder form. About 90% of raw milk remains as liquid whey, while the other 10% becomes cheese.