January 14, 2004

China's Sanyuan To Build RMB 30 Million Cow-Breeding Base in Hebei

Beijing Sanyuan Group, one of the largest dairy makers in China, will invest over RMB 30 million in building a cow-breeding base in Qian'an City, Hebei Province. The base will be operational in September 2004 with daily output of 2 million tons of milk.

The cow breeding base in Hulunbeir region, Inner Mongolia Autonomous Region, one of main milk supply bases of Beijing Sanyuan, had invested in over RMB 20 million in improving its milk output, because it cannot satisfy the fast-growing needs of Sanyuan.

Therefore, the company is urgent to add its cow breeding base in order to build a solid foundation to its take-off.

Insiders said that Beijing Sanyuan controlled over 80% milk supply in Beijing as a local company. Qian'an City is only 440 kilometers away from Beijing, and had comparatively adequate milk supply capacity with cheap workforce. The base in Qian'an will relieve the bottleneck of milk supply of Sanyuan.

In another hands, Hebei Sanlu (three deer) is the lord of the cow breeding resource in Hebei. Sanyuan's entry will likely trigger a war between the two companies.

RMB = Ren Min Bi (China's currency)