Liquid Milk Boom in China

China Milk Products has posted a 26.3% increase in full-year profit to RMB272.6 million as the demand for liquid milk in preference to powdered products soars in the rapidly growing economy.

Sales grew 23.5% to RMB301 million, the Chinese dairy group said as it published its first financial results since the group listed in March. Liquid milk was once viewed as a luxury product in China compared to cheaper powdered products, but is now becoming more popular as the economy grows.

The recent listing on the Singapore Stock Exchange raised net proceeds of approximately SGD53.69 million which will be used to expand its herd of dairy cows by 3,000, the company said.

CEO Liu Hailong commented: “Going forward, we want to leverage the strong growth momentum of dairy products in the PRC by moving downstream to process our raw milk for our customers such as dairy products manufacturers, as well as develop our proprietary ‘Yinluo’ brand of dairy products. I’m happy to report that our new dairy processing plant in Daqing, which will have an annual production capacity of 150,000 tons, will likely be ready by end-2006.”

The company said that with the continuous growth of the PRC economy, the rising affluence and improvement of living standards, coupled with the more consumers demanding healthier, more nutritious foods, such as dairy products, it believes the demand for raw milk will continue to rise.