Huaxia Dairy Farm receives US50m injection

Related tags Finance Milk

Reuters has reported that Asia buyout firm Olympus Capital is leading an investor group that has injected US$50m to expand China's Huaxia Dairy Farm, which produces the raw milk that is in short supply in China's growing dairy sector.

Foreign investors have been positioning themselves as safer alternatives in China's dairy sector after a lethal baby formula scandal four years ago, but need raw milk to make premium products.

This is the second Olympus-led injection into Huaxia. Last year the firm led a group including European dairy firm Mueller Milch Management that invested US$45m for a minority stake.

Olympus invested US$38m in the latest financing, bringing its total investment in Huaxia to US$68m. Other investors include California Technology Ventures, Herostar Holdings and Grand River Capital.

Earlier this year Danish-Swedish dairy group Arla Foods Amba , said it would buy a 6% stake in China Mengniu Dairy from private equity firm Hopu for US$289m.

Huaxia Dairy said it is completing two new farms and expanding its Wondermilk gelato and yogurt stores in Beijing with five stores planned to be open by the end of the year.