November 1, 2011

China Modern Dairy Holdings Ltd said its dairy farm in Bengbu, northern Anhui province will begin housing dairy cattle next February with an estimated capacity of 40,000 head within two years.

By the end of June, the listed company has had about RMB 1.3 billion cash on hand. Total investments in Bengbu dairy farm totalled around RMB1.8 billion (US$283 million).

China Modern Dairy main financing channels are bank loans and self-owned resources, said the chief financial officer. The selling price of each kg of milk is around RMB3.86 (US$0.61) and inches up to RMB3.9 recently.

Chairman Deng Jiuqiang said the company currently owns 16 dairy farms, including four ones in progress and 10 ones to be established, and aims to increase the number of dairy farms nationwide to 30 within five years. The to-be-established dairy farms include the two-phase Guangdong farm, the nearest one to Hong Kong.

The government's policy to stimulate the animal husbandry industry helped the company to get land by spending no money by far, as all the land for building dairy farms are developed as agricultural land after being approved by the government.