August 9, 2007

China's Bright Foods Group to invest in new cattle farm

China's Bright Foods Group will invest RMB1.5 billion in a new dairy cattle farm in Jiangsu province. The proposed Haifeng Dairy Cattle Farm will be stocked with 30,000 heads of cattle upon completion.

Expansion to reap economies of scale is an essential move to ease pressure from rising production and raw material cost. This is particularly so, given the stiff competition in China's dairy production industry, where more players have emerged in the recent years.

Currently, Bright Foods Group's holding of farms include Jinshan diary cattle farm, which has a stock of some 6,000 heads of dairy cattle, as well as other farms located in Chongming and Haimen districts in Jiangsu province.

The construction of Haifeng Dairy Cattle Farm will be divided into three phases. The first phase, which will cost RMB350 million in initial investment, is scheduled for completion by the end of 2008.

RMB1=US$0.1320 (Aug 9)