March 27, 2007

China's Liziyuan to list on US market in June

China's Zhejiang-based Liziyuan Dairy Products Limited will be listed on New York's stock exchange June 8, the company's vice-president Wei Bohai said.

Established in 1995, the company is now one of the top industrialised agric-companies in the nation. The company currently has 10 shareholding companies located in various provinces of China, 25 industrial-scale operations and a dairy product research centre.

The company realised sales of more than RMB 400 million (US$51.7 million) in 2006. The volume of milk it sold put the company at the nation's top 10 milk companies last year. 

Preparations for listing began in October last year. Wei explained that one reason the company chose to list in the US was because of the limited capital market in China. Moreover, more than 1,200 companies in China are waiting in line to seek listing in the local stock exchange. For a company in search of capital to expand, waiting in line would mean losing excellent market opportunities.

On the other hand, the US market offers a fixed time limit for waiting and collected funds are available shortly once listing is done. These meant the company would be able to gain access to needed capital in a shorter timeframe. 

To lower its risk exposure, Liziyuan has only listed one of its subsidiaries. The subsidiary is currently being assessed for its management prowess, capital flow and profitability.

Liziyuan intends to use the funds obtained to open up the corn juice market. The company is working with Zhejiang Industrial University in its research for corn juice production and plans to embark on industrial scale production to add corn juice as another revenue source.