China Huishan Dairy Holdings Company Limited plans to invest up to CNY2.5 billion to build a new dairy base in Yancheng, Jiangsu province.
Huishan Dairy said that the company has signed a strategic framework agreement with the government of Sheyang county to establish a full dairy product industrial supply chain in Yancheng, Jiangsu province, covering fodder cultivation and processing, cow breeding, and dairy product processing, sales and marketing. The products will be distributed to the East China market.
At the same time, Huishan Dairy and Jiangsu Zongyi Group signed an agreement to jointly invest CNY1 billion to set up a joint venture. Zongyi Group will invest CNY350 million and the company will also participate in the operation of Huishan's base project in Yancheng.
Meng Xianmin, marketing vice president of Zongyi Group, said that the company has been researching opportunities in Yancheng for a long time.
In addition, Huishan Dairy is reportedly talking with Royal FrieslandCampina N.V. for infant formula joint production. The two parties expect to reach a final deal at the end of 2014.