RSS   Newsletter   Contact   Advertise with us

Feihe Dairy buys goat milk producer SGDI

Staff writer ▼ | February 21, 2014
Heilongjiang Feihe Dairy Co Ltd, a subsidiary of Feihe International Inc, will acquire a 70 percent stake in Shaanxi Guanshan Dairy Industry Co Ltd (SGDI) for approximately 300 million yuan ($49 million).
SGDI
SGDIHeilongjiang Feihe Dairy Co Ltd, a subsidiary of Feihe International Inc, will acquire a 70 percent stake in Shaanxi Guanshan Dairy Industry Co Ltd (SGDI) for approximately 300 million yuan ($49 million).


The company is extending its portfolio into the goat milk powder business as it targets high-end consumers, a company executive said. The deal, which is being finalized, is seen as an early step in the government's drive to rationalize the sector. Specific policies for the industry are expected to be released by the end of this month.

SGDI will offer Feihe a way to grab share in a market with huge growth potential. Leng Youbin, chairman of Feihe Dairy, said the goat milk powder market, valued at 3 billion yuan annually, is expected to grow into an industry worth 10 to 20 billion yuan within 10 years.

The market for cows' milk is worth nearly 60 billion yuan. The move will allow Feihe to expand its product lines and capture more high-end customers. Prices for goat milk powder are often twice those of cow milk powder. Goat milk is also a good substitute for those who are allergic to cow's milk.

Feihe will retain the Guanshan brand. It's expected to replicate its cow milk production system and transform SGDI's goat farm operations from the household level into large-scale production.


 

MORE INSIDE POST