Feihe Dairy plans to acquire 70% of Guanshan

Children pass by an advertisement of Feihe Dairy in Beijing, May 12, 2009. Feihe Dairy, a subsidiary of Feihe International, plans to acquire 70 percent of shares of Guanshan Dairy for about 300 million yuan ($49 million). [Photo by Wu Changqing / Asianewsphoto]

Feihe Dairy, a subsidiary of Feihe International, plans to acquire 70 percent of shares of Guanshan Dairy for about 300 million yuan ($49 million), to extend its dairy business with goat milk powder for high-end consumers.

Though the deal is still to be finalized, Leng Youbin, chairman of Feihe Dairy, told China Daily on Wednesday that Feihe hopes to copy their cow milk production chain and transform Guanshan's household farming of goats into large-scale production.

He said the goat milk powder market, now worth 3 billion yuan, is expected to grow into an industry valued at 10 to 20 billion yuan in 10 years. Feihe will keep Guanshan's brand.

Goat milk powder often costs twice the price of cow milk powder and is beneficial to those who are allergic to cow milk, Leng said.