---
title: "Modern Farming CEO First Discusses 'Keniu' Benefits, Unveils New Five-Year Goals"
description: "At its 15th anniversary celebration and 10th year on the Hong Kong Stock Exchange, China's largest dairy farming company Modern Farming set new targets. The company launched its 'Five-Year Leading Plan' aiming to double both cattle and milk production by 2025, increasing dairy cows from 250,000 to over 500,000 and annual fresh milk output from 1.5 million tons to over 3.6 million tons, while also entering the beef cattle industry. CEO Gao Lina discussed the company's role in the 'Keniu' project with Mengniu and Coca-Cola, and highlighted new opportunities in the post-pandemic era."
author: "小食代"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2020-12-19"
language: "en"
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# Modern Farming CEO First Discusses 'Keniu' Benefits, Unveils New Five-Year Goals

> At its 15th anniversary celebration and 10th year on the Hong Kong Stock Exchange, China's largest dairy farming company Modern Farming set new targets. The company launched its 'Five-Year Leading Plan' aiming to double both cattle and milk production by 2025, increasing dairy cows from 250,000 to over 500,000 and annual fresh milk output from 1.5 million tons to over 3.6 million tons, while also entering the beef cattle industry. CEO Gao Lina discussed the company's role in the 'Keniu' project with Mengniu and Coca-Cola, and highlighted new opportunities in the post-pandemic era.

In the fifteenth year since its establishment and the tenth year since listing on the Hong Kong Stock Exchange, Modern Farming, China's largest dairy farming enterprise, has set new goals for itself.

At the 15th anniversary celebration held yesterday in Bengbu, Anhui, Modern Farming released and officially launched its 'Five-Year Leading Plan', proposing to achieve 'double doubling' of cattle and milk by 2025: increasing the dairy cow herd from the current 250,000 to over 500,000, and annual fresh milk production from the current 1.5 million tons to over 3.6 million tons, while also entering the beef cattle industry.

Modern Farming President Gao Lina stated yesterday that the company is already the world's largest dairy farming enterprise in terms of mature cow herd size.

In a recent exchange with Foodinc, Gao Lina also discussed Modern Farming's future role in the 'Keniu' project, a collaboration between Mengniu and Coca-Cola, as well as new opportunities and goals in the post-pandemic era, and her views on the new landscape of domestic milk sources.

Let's take a closer look at the details below.

**-01-**
**On 'Keniu'**

Foodinc noted that at yesterday's 'birthday party' for Modern Farming, Mengniu Group President Lu Minfang and Edward Burger, General Manager of Dairy at Coca-Cola Greater China, also attended to show support.

Mengniu Group President Lu Minfang

Although Mengniu and Coca-Cola have not yet disclosed more details about the market size and production plans of the 'Keniu' joint venture, some information can be gleaned from the Modern Farming Bengbu base where the project is located. According to data, this pasture is the largest single-site pasture in Asia and is described by Modern Farming as 'the largest in scale, highest in automation, best in cow quality, most advanced in management, and most scientific in feeding'.

According to information previously released by the Wuhe County People's Government of Bengbu, the total fixed asset investment for the above project is 2.1 billion yuan, planned to be invested in four phases, with the first phase investing 500 million yuan.

Modern Farming President Gao Lina

Gao Lina introduced to Foodinc that the project is jointly controlled by Coca-Cola and Mengniu, and will invest in new professional production equipment at the Modern Farming Bengbu pasture for the production and sale of high-end finished low-temperature milk.

'This will be an innovative type of milk, and this milk is designed according to individual nutritional needs. It is recombined from protein, fat, vitamins, and other aspects, with no additives. Therefore, such a milk has extremely high requirements for the quality of the milk source,' she pointed out. The Bengbu pasture is the largest single-site pasture in Asia, with a daily milk production of over 600 tons, and each lactating cow can produce over 60 jin of fresh milk per day. This is also the reason why the project chose the Modern Farming Bengbu pasture.

So, as the raw milk supplier for the 'Keniu' project, what benefits will Modern Farming reap from it?

'The specific revenue figures are not yet known, but I believe they will definitely be positive. In fact, we value more the new technology and new R&D and production team introduced by this project, hoping it can bring more innovation to our raw milk processing and technical management,' Gao Lina said. She told Foodinc that she believes 'Keniu' will 'bless' the Modern Farming brand, helping it solidify its position as the number one brand for Chinese raw milk.

**-02-**
**New Landscape of Milk Source Competition**

Since the beginning of this year, there have been continuous new developments in the domestic upstream milk source. Less than two months after New Zealand dairy giant Fonterra sold its three pastures in China to Youran Dairy and Sanyuan Venture Capital Co., Ltd., Youran Dairy submitted a prospectus to the Hong Kong Stock Exchange, officially starting its listing process.

What changes will the above series of actions bring to the domestic milk source landscape? In response, Gao Lina told Foodinc that this fully demonstrates that downstream dairy companies are beginning to accelerate the integration of upstream milk source resources.

'The downstream dairy market in China shows a situation where leading companies are large in scale and growing rapidly, urgently needing upstream suppliers with matching scale and broad layout to meet their high demand. Therefore, accelerating integration is natural. Only companies with sufficient and high-quality milk sources will have more opportunities in future competition,' Gao Lina pointed out. From the perspective of upstream layout, any upstream farming enterprise that is large-scale and has a certain foundation has basically been 'divided up' by downstream leaders in the past two years.

She also believes that the competition among dairy leaders for upstream milk source resources is far from over, but will continue to develop in a more focused direction. On the one hand, the 'clustering effect' of the industry chain is prominent, and upstream and downstream dairy enterprises hope to increase industry concentration through mergers and reorganizations, jointly building dairy enterprises with international influence and competitiveness.

Former Chairman of Modern Farming Deng Jiuqiang (left)

and Modern Farming President Gao Lina received the Lifetime Honorary Award

For example, Modern Farming has introduced Mengniu and New Hope Dairy as its two major shareholders, creating a community of shared interests in planting, breeding, and processing, improving collective risk resistance. Currently, 80% of its raw milk is supplied to Mengniu, and 10% to New Hope Dairy, achieving precise matching of raw milk production to demand. At the same time, it also increases revenue by providing customers with raw milk for high value-added categories such as low-temperature milk and A2 milk.

On the other hand, as consumption upgrades drive people's health awareness and attention to food safety, consumers' choices, consumption methods, and consumption scenarios for dairy products are becoming more diversified, and consumption of dairy products is no longer limited to milk. This promotes the rapid promotion of dairy products and also places higher technical requirements on upstream dairy enterprises in terms of quality.

**-03-**
**New Opportunities in the Post-Pandemic Era**

So, what impact has the global pandemic this year had on the national and even global milk source landscape? What new opportunities does the company see in the post-pandemic era?

Gao Lina told Foodinc that internationally, the sudden COVID-19 pandemic has caused significant impact and influence on major dairy regions such as the EU, Australia, and New Zealand, mainly reflected in multiple links such as feed and raw material production and supply, milk source production, dairy processing, logistics and freight, and domestic and international dairy trade. Many countries even experienced milk dumping and sharp drops in milk prices.

Domestically, although the pandemic has caused some impact on society and the economy, in the long run, large-scale dairy farming will maintain a positive trend.

She cited examples: Most of Modern Farming's pastures are in rural areas, and effective epidemic prevention mechanisms were quickly adopted, so the impact of the pandemic was relatively small, and raw milk production and sales remained normal. The company's interim results released in August show that in the first half of this year, Modern Farming achieved sales revenue of 2.828 billion yuan, a year-on-year increase of 10%; net profit was 221 million yuan, an increase of 77% year-on-year.

Looking ahead to the post-pandemic period, Gao Lina believes that upstream dairy farming will usher in two major opportunities.

'From the pandemic situation, large-scale pastures have more advantages than small and medium-sized pastures in terms of management technology, epidemic prevention levels, and customer milk collection guarantees, indicating that large-scale farming is the only way for China's dairy cattle farming. And this pandemic has provided an opportunity for the integration of the domestic dairy farming industry,' she said.

Secondly, in the post-pandemic era, consumers' demand for domestic dairy products and health awareness continue to strengthen, and the market development space for dairy products such as low-temperature milk and cheese is relatively larger, thereby creating more demand for high-quality raw milk.

'We plan to increase total annual raw milk production to 2 million tons by 2023, increase the average annual yield of comprehensive lactating cows to 13 tons, and increase the dairy cow herd to over 300,000. At the same time, all 26 pastures of Modern Farming must 100% meet the S-level dairy farm standards. In terms of own-brand milk, in addition to strengthening new product development, we will also lay out third- and fourth-tier cities and traditional sinking channels, adopt direct supermarket operations in first-tier cities, and will also make efforts in online layout in the future,' Gao Lina said.

## Source: Foodinc (ID: foodinc)
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