June 27, 2007

China now the world's third largest dairy processor

China has become the world's third largest dairy processor, overtaking Russia and Pakistan, according to the director of the country's dairy association Liu Chenguo.

In an interview with the China Securities Journal, Liu said dairy processing in the country increased by 15 percent during 2006 to 32.9 million tonnes.

As China continues to develop into a leading economic power, it is starting to catch up with traditional dairy powerhouses such as the EU and Australia, Liu said.

The continuing growth of China's processing capacity was the result of growing domestic demand from a population which has become more affluent, Liu added.

China's average consumption of dairy products last year reached 25.6 kg, a 76 percent increase since 2000.

The increase has also been fueled by the fact that dairy product consumption is spreading from the major cities to provincial towns and villages.

Thanks to this increased consumption, sales of the major dairy processing companies have increased seven-fold in the past eight years to RMB 104 billion (US$13.6 billion) last year, Liu said.