"China's soybean market is substantial," Roger Liu, ADIY's CFO announced. "Domestically, it is a $1.5 billion industry and growing at a rate of 20 per cent per year."
In constructing this facility, American Dairy is aiming to capitablise on the rapid rise in soybean consumption in China. Currently the country's soybean processing capacity is undergoing serious development, but it is still not matching demand. In the past ten years the 38 soybean processors now involved in this segment have upped production capacity increased by 100 per cent, but equally soybean imports have increased by 1000 per cent.
The 37,674 square feet soybean mill is a part of American Dairy's new 10 acre milk processing plant in Kedong County, Heilongjang Province, China. This workshop is a $3 million investment which will increase production capacity by 350 per cent. By adopting Japanese technology and efficiency, American Dairy will be capable of processing an additional 5,000 tons of high quality, soybean powder annually, bringing production capacity to a total of 7,000 tons.
"We have access to an abundant amount of the highest quality, raw soybean available," Leng You-Bin, ADIY's chairman and CEO stated. "Heilongjang Province is one of the largest harvesting locations in the world.
"Soybean powder sells at an average price of $1,400 per ton," added Liu. "We will see additional revenue from our soybean powder operation; production is expected to be near full capacity in 2005."
Currently soybean is the fourth largest crop after rice, wheat and corn. China's three main soybean production regions, in order of importance, include the Northern Spring Sowing Region, consisting of Heilongjiang, Jilin, Liaoning and Inner Mongolia; the Northern Summer Sowing Region , which includes Henan, Shandong, Hebei and Anhui; and the Southern Poly-Cropping Region.
American Dairy was formed in May of 2003 and subsequent acquisition of BeiBei Foods at the end of the year. Getting off to a strong financial start and sound financial backing has given the company the opportunity to expand its portfolio outside of dairy products and into the equally lucrative soybean market. The company is equally expanding in the dairy segment, and is current constructing a new dairy processing facility on a 40 acre site in Kedong County that will eventually process 20,000 tons of milk a year.