American Dairy Inc, Formula for Success
American Dairy, Inc. (OTCBB: ADIY), one of the leading producers and distributors of milk powder and soybean products, is prepared for China’s emerging dairy industry. China’s increasing consumption of dairy products in their daily diet has led many companies into the industry.
(PRWEB) November 3, 2004 -- American Dairy, Inc. (OTCBB: ADIY), one of the
leading producers and distributors of milk powder and soybean products, is
prepared for China’s emerging dairy industry. China’s increasing consumption of
dairy products in their daily diet has led many companies into the industry.
There are obviously good reasons for industry experts to predict the
growth of Chinese dairy consumption, as the society becomes increasingly health
conscious and prosperous. “In the next five years, the dairy market will
maintain an average two-digit growth every year,” said Chen Yu, an industry
expert from the China Dairy Market Consultancy in Beijing.
Despite
several attempts, foreign producers have been unsuccessful at taking a firm
position in China’s growing milk market. Records have shown many firms resorting
to “Plan B,” purchasing equity interest in market leaders.
“Multinational companies are trying to re-enter the rapidly growing
Chinese milk market through mergers and acquisitions after having backed away
from the market due to poor business,” said Yu.
For example, Danone
(NYSE: DA) recently became the third largest stockholder of Shanghai-based
Bright Dairy. Another dairy giant, New-Zealand based Fonterra, is in final talks
with Shijiazhuang Sanlu Group Co. Ltd., to buy a 39 percent stake in the firm.
Multinational giants are represented by Nestle (OTC: NSRGY), MeadJohnson—a
Bristol-Myers Squibb Company (NYSE: BMY), Wyeth (NYSE: WYE) and Intel.
According to China Marketing and Media Study (CMMS), foreign dairy
giants have failed because: (1) Multinational companies have fewer dairy farms
in China because of sensitivity of land issues, which has put them at a
comparative disadvantage since parents prefer high quality, safer and healthier
goods for their children. (2) Advertising on television and newspaper is not
always the best marketing strategy; traditionally, dairy distribution relies on
a network reaching every street and community of a city. (3) Multinational
companies focus on high-end products (yogurt, cheese, etc.) which are not
aligned with Chinese consuming habits as of yet.
China’s dairy
industry’s tremendous growth is largely contributed by the infant market with 20
million babies born each year. According to the CMMS data, 63% of the families
surveyed had fed their children with milk powder or rice flour refined specially
for babies. Among them, 58% had bought milk powder and 32% had purchased rice
flour.
Because of China’s single-child policy, quality of products is
one of the highest priorities for parents, who demand only the best for their
one child.
“It is our commitment to nourish our newborns and their
mothers with the finest products,” said CEO, Leng You-Bin of ADIY.
“Our
analyses and knowledge of China’s dairy industry give us compelling evidence
that we have found the formula for success—by becoming the leader in China’s
infant dairy industry,” said Leng.
Certain of the statements made herein
constitute forward-looking statements that involve risks and uncertainties. In
such instances, actual results could differ materially as a result of a variety
of factors including the risks associated with the effect of changing economic
conditions at home and abroad, variations in cash flow, reliance on
collaborative retail partners, and on new product development, variations in new
product and service development, risks associated with rapid technological
change, and potential of introduced or undetected flaws and defects in products
and services and other risk factors detailed in forms filed with the Securities
and Exchange Commission from time to time.
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(2)
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(3)
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(4)
http://www.chinadaily.com.cn/english/doc/2004-05/13/content_330340.htm
(5)
http://www.chinadaily.com.cn/english/doc/2004-06/11/content_338547.htm
(6)
http://www.bjreview.com.cn/200407/Business-200407(C).htm
(7)
http://www.bjreview.com.cn/200407/Business-200407(C).htm
(8)
http://www.chinadaily.com.cn/english/doc/2004-06/11/content_338547.htm
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Source : http://www.prweb.com/releases/2004/11/prweb174537.htm