A notice from Long County, Shaanxi, reveals that COFCO Packaging, which recently invested heavily in JDB, is also eyeing the domestic goat milk powder industry. Little Food Times learned that this largest milk powder can producer under COFCO plans to invest 50 million yuan to build a milk powder can production line in Shaanxi, and local authorities have reviewed and approved the project filing. First Year Revenue of 10 Million Yuan A notice published yesterday by the Long County Development and Reform Bureau shows that it has received the "Report on Application for Filing Confirmation of the First Phase Construction Project of an Annual Output of 70 Million Milk Powder Cans Processing Production Line" (COFCO Packaging Chengdu Shaanxi Company [2018] No. 1) submitted by the Shaanxi Branch of COFCO Packaging (Chengdu) Co., Ltd. After review, the project complies with the "Measures for the Administration of Verification and Filing of Enterprise Investment Projects in Shaanxi Province," and the bureau agreed to confirm the filing. It also believes the project aligns with the local goal of "achieving the development of the entire goat milk industry chain and building a 10-billion-yuan ecological dairy capital." The notice also disclosed that the project has an estimated total investment of 50 million yuan, with funds self-raised by the enterprise. Upon completion, it can produce 70 million milk powder cans annually, with first-year sales revenue of 21 million yuan and profits and taxes of 1.5 million yuan. In 2019, sales revenue is expected to reach 65 million yuan, and after reaching full production, annual sales revenue can reach 200 million yuan. It is not yet clear which customers COFCO Packaging's milk powder cans will supply, but according to Little Food Times' statistics, local goat milk powder producers include Hesh Dairy and Guanshan Dairy. Last year, the local government issued a document predicting that by 2020, Long County's annual goat milk processing capacity would reach 100,000 tons. Today, Little Food Times reviewed the company's 2017 financial report, which showed that its milk powder can business revenue was 570 million yuan last year, compared with 495 million yuan in 2016. Its customer list includes Yili, Feihe, Junlebao, Wyeth, and Mead Johnson. COFCO Packaging also stated in the financial report that it would seize the opportunity of domestic milk powder manufacturers registering formulas and accelerating downstream integration to optimize the geographical layout of its production capacity. "100-Billion Goat Milk" Data shows that since Shaanxi proposed the "100-billion goat milk industry plan" in 2017, the province's goat milk industry has entered a period of rapid development. Media reports indicate that currently, Shaanxi has 46 dairy enterprises above designated size, with main business revenue of 16 billion yuan and total dairy product output of 1.8 million tons. Nineteen dairy enterprises have obtained infant formula milk powder production licenses, ranking second in the country after Heilongjiang, a major dairy province. Some experts believe that the 100-billion target specifically refers to the total operating revenue of the primary, secondary, and tertiary industries, upstream and downstream, and the entire industry chain in the goat milk industry. Previously, Wang Baoyin, chairman of Hongxing Meiling, the first goat milk listed company in Shaanxi, proactively proposed to contribute at least 10 billion yuan to the province's 100-billion goal, including completing equipment installation for a cheese production line with an annual output of 3,000 tons and building a smart production center for 20,000 tons of goat milk powder annually. Performance of Goat Milk Enterprises COFCO Packaging's entry may be due to the large development space in the goat milk market. Wang Zhigang, managing director of Shaanxi Growth Enterprise Guidance Fund Management Co., Ltd., previously told media that the milk powder market was about 360 billion yuan in 2017. Among them, the goat milk powder market was 20 billion yuan, while in 2014 it was only 3-4 billion yuan. Industry experts also point out that the goat milk powder market is currently growing at an average annual compound rate of 20%-30%, with some enterprises exceeding 30%. Consumer awareness of goat milk powder is continuously improving. Currently, large dairy companies including Yashili, Feihe, Synutra, and Ausnutria have all entered the production and operation of goat milk powder. At present, Ausnutria is the largest goat milk powder producer in China and even globally. In 2017, its infant formula goat milk powder brand Kabrita achieved sales of 1.28 billion yuan, a year-on-year increase of 60.2%. In addition, Synutra Youbo goat milk powder achieved revenue of 300 million yuan in 2017, a growth rate of up to 500%. Source: Little Food Times -END-