Yuan Sheng Tai Dairy Farming Join Stock Co., Ltd. plans to purchase dairy goat assets of RMB 131 million to provide milk source for milk powder 12-12-2021

On November 19, Yuan Sheng Tai Dairy Farming Join Stock Co., Ltd. announced that its subsidiary, Shaanxi Ruixiang Chengda Animal Husbandry Co., Ltd., intends to purchase Shaanxi Lüneng Ecological Animal Husbandry Co., Ltd.'s milk goat breeding facilities, goat milk production lines, and land use rights for several breeding farms at a price of RMB 131 million.

 

According to the information quoted by Yuan Sheng Tai, in 2019, Shaanxi Lüneng had about 2.4 million dairy goats, 700,000 tons of goat milk, 129,000 tons of related goat milk products, and an output value of about RMB 28.5 billion in the goat milk industry chain. In 2020, the market size of goat milk powder for infant formula will exceed RMB 10 billion, and it is expected that the market size will reach RMB 20 to 30 billion within 3 to 5 years.

 

Yuan Sheng Tai’s parent company Feihe with eyes on goat milk market

Yuan Sheng Tai believes that China's goat milk market has a huge potential, and it is interested in the high-quality milk goats and breeding facilities of the seller, Shaanxi Lüneng. The acquisition will enable Yuan Sheng Tai to further expand its business in the fast-growing goat milk market and enrich and expand new product series to meet customer needs.


As the controlling shareholder of Yuan Sheng Tai, with a shareholding ratio of 100%, China Feihe completed the transfer of the controlling rights of the infant goat milk powder company Shaanxi Xiaoyang Milk Dairy Co., Ltd. in July this year. This is the first time that Feihe has rejoined the goat milk powder market in seven years. The company will make sweeping changes in management in order to emulate Feihe's entire industrial chain model in milk powder.


New regulations arise in China’s growing goat milk market

In order to further regulate the labeling of infant milk powder formula products, force enterprises to carry out their responsibilities, and safeguard the legitimate rights and interests of consumers, China’s Administration of Market Supervision issued an “Announcement on the Further Standardization of the Labeling and Marking of Infant Milk Powder Products" on November 12.


The announcement requires that if an animal appears in a product’s name, then all milk protein sources such as raw milk, milk powder, and whey powder that are used in the product should come from that species. If a milk protein raw material has two or more animal origins, the proportion of each animal’s raw materials shall be indicated in the ingredient list.


This regulation is mainly aimed at the mixed goat milk formula for infants and young children currently on the market. Zhu Danpeng, a Chinese food analyst, says that the goat milk powder industry is still in the early stages of development, and there are many instances in the industry in which goat milk powder is added with cow whey and sold as pure goat milk powder.


The new regulations imply that goat milk powder mixed with cow whey will no longer be simply labeled as goat milk powder. Rather, this type of goat milk powder must indicate the proportion of goat milk and other animal raw materials in its ingredient list.


For more information, please check our Dairy Products China News.


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