The group's decision to form a strategic alliance with Dutch Mill marks the growing importance of the country's dairy sector to processors and packagers.
Danone's operations in Asia currently account for €2.2bn in sales, and it is keen to increase its presence in the region through the growing market for health orientated dairy products in Thailand.
According to the company, consumption in Thailand alone for fresh dairy products is around 4 kilos a year in average per capita consumption.
This figure according to predictions made last year by Kasikorn Research Center, will continue to rise due to growing demand in the country for healthier products.
The group added that niche categories like the ready-to-drink yoghurt were expected to drive growth in Thailand's yoghurt sector by 15-20 per cent per year.
It added that other speciality products including high-calcium milk are also expected to grow in popularity.
Danone hopes that establishing itself with a company that already boasts a number of popular brands in the country, like Dutch Mill, will allow it to better adapt to challenges within the market.
As such, through its new local arm, Danone Dairy Thailand, the company will combine its own technical and marketing resources with Dutch Mill's distribution and production capabilities.
Yol Phokasub, Chief Operating Officer of Dutch Mill Co., believes that that the partnership will benefit both companies operations in the country.
"Thanks to Danone's technical and R&D capabilities, we expect to shorten the time-to-market for value added products and thus contribute positively to improve the Thai dairy industry".
The sentiments were shared by Bernard Hours, Danone's VP for Fresh dairy products, who emphasized the importance of Dutch Mill's knowledge of the market and distribution capabilities to their future success in the country.