March 21, 2008

China raises the bar for new entrants to its dairy processing market

China will impose stricter requirements for new dairy processing factories on April 1 to rationalize the industry, China's Xinhua news agency reported.

The National Development and Reform Commission (NDRC) released a list of entry requirements Thursday (March 20, 2008), which said that new projects should have a 24-hour processing capacity of more than 200 tonnes.

The commission also required new projects to be at least 60 miles from existing facilities and the factory should have dairy sources equivalent to its production capacity.

Fresh milk should account for 50 percent of the content of milk powder, while liquid milk should be produced with 100-percent fresh milk, it said.

The requirements aim to encourage dairy processing enterprises to grow through mergers and acquisitions and phase out smaller facilities. The NDRC also specified requirements such as production techniques, equipment, sanitary conditions and product quality.