Heilongjiang's Beiya aims to be dairy giant
By Liu Jiawen (China Daily)
Updated: 2004-05-20 16:35

China's dairy industry has started attracting more and more investors since last year, thanks to increasing economic returns in this field.

Of all the newcomers, Heilongjiang Beiya Dairy Co Ltd in Northeast China has drawn most of the public attention with a large sum of investment from the Beiya Industrial Group Co Ltd, a company always best known for railway transportation and high-tech development.

Last January, Beiya Industrial invested more than 50 million yuan (US$6 million) in establishing Beiya Dairy, aiming to become the largest dairy manufacturer in China.

It plans to sink a total of 2 billion yuan (US$241.8 million) in the future to become a dairy behemoth, with annual liquid milk production reaching 500,000 tons.

"Everything about our company is new, but at the same time of the latest and highest standards," said Beiya Dairy Chairman and General Manager Yu Hongbo.

He said that the company would build 10 dairy farms and in the meantime import 10,000 heads of the best-quality cattle.

"We will endeavour to build the farms into a State-level raising base for the best cows, as well as an organic milk production base," Yu added.

The company will also establish 80 mechanized milk parlours with a daily capacity of 420 tons along the National Road 301, which links Harbin, Daqing and Qiqihar cities in Heilongjiang.

In addition, the dairy producer has signed agreements with a number of cattle breeders for providing unprocessed milk.

Some neighbouring counties and villages have also joined in to serve as enclosed dairy farms.

According to Yu, the company has completed the first phase of construction, which has enabled a daily production of 500 tons of fresh milk with an investment of 690 million yuan (US$83 million).

"By the end of 2007, we are expecting to increase our daily fresh milk production to 1,000 tons, becoming the largest producer in China," he said.

The company plans to produce five main lines of products with 29 varieties, including such specific brands as baby milk.

"We will launch our first products to the domestic market next fall, which I believe will give a positive impact to the market and speed up the industry's development," Yu said.

But before its own factories can operate for production, Beiya Dairy will make OEM (original equipment manufacturer) products first.

"Brands are important for a company's development. That's why we choose this way to forge our brand first," Yu explained.

"Beiya is competitive in its high qualified milk source and advanced technologies, compared with our domestic rivals."

Since its establishment, the company has recruited a wealth of highly skilled personnel and senior managers.

Also, it has established a sound co-operative relationship with local science and research institutes such as the Heilongjiang Micro-organism Research Institute, using them as the company's own research and development bases.

The company has also employed Guo Mingruo, a famous scientist who is now a professor at the University of Vermont in the United States, as a leading expert of its panel to develop the newest types of milk products.

Marketing is also emphasized in Beiya Dairy's development plan.

It will focus on the market in Northeast China, and put in more efforts in several areas with high consumption capability such as Beijing, Tianjin, the Yangtze River Delta and the Pearl River Delta.

The coastal regions are also its target markets.

At the same time, the company plans to tap a number of markets outside of the Chinese mainland, including Russia, Hong Kong, Macao and some Southeast Asian countries.

Now it has clinched partnerships with retail agents in 17 cities in China, and it will soon launch a series of nationwide promotion activities.

According to Yu, Beiya Dairy can earn an annual income of 3 billion yuan (US$363 million) with profits 375 million yuan (US$45 million) after all its projects are completed in 2007.

And now that its first phase of construction has been completed, it is expected to earn an annual income of 1 billion yuan (US$121 million) with profits of 120 million yuan (US$15 million).

With this, relevant local farmers can see a total increase of 300 million yuan (US$36 million) to their net income.

About 50,000 rural households of rural around Daqing City will benefit from the first phase of production, Yu said.

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