Consumer China

American Dairy's cash cow

  • Published 26 Nov 2009

The company's milk powder sales are booming thanks to escaping last year's melamine milk scandal.

Background:American Dairy (ADY:NYSE), through its wholly-owned Feihe Dairy brand, is a Chinese producer and distributor of infant formula, milk powder, and soybean, rice and walnut products. The company was one of the few major domestic dairy companies not implicated in last year's melamine milk scandal, which helped boost its share of the infant formula market from around 2.7% to 7.3%, the company said. American Dairy plans to increase its 90,000 nationwide sales outlets to 100,000 by year end and expand to Shanghai in 2010. Its six production facilities have a total milk powder production capacity of 1,220 tonnes per day. The company received $63m (Rmb 430m, €42.2m, £38m) from Sequoia Capital in August.

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