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August 10, 2017

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Feihe’s new plant aims to milk success

FEIHE International Inc, a top manufacturer of infant formula in China, is building a production plant valued at C$300 million (US$234 million) in Kingston, Canada.

Leng Youbin, the company’s chairman, told Xinhua on Tuesday in Ottawa that the Feihe board decided to set up the plant in Kingston in Ontario province “because of better natural and cultural environments.”

“We inspected many places, including some in the US and other parts of Canada, and came to conclusion that Kingston is a very good place for production,” Leng said.

Xia Xiang, economic and commercial counselor at the Chinese Embassy in Ottawa, said this would be China’s biggest investment in Canada’s agri-food sector so far and it is also Canada’s largest foreign investment in the field.

According to Xia, Canada hasn’t made its own baby formula for more than 20 years. The Canadian Dairy Commission tried for a couple of years to find a domestic processor, but no Canadian processors were interested in expanding into formula.

The Canada Dairy Commision then broadened its search to European and Asian companies. In April 2016, it found its fit in Feihe — a manufacturer with over 50 years of experience and keen to expand to North America. The deal on the plant was signed by Feihe and Kingston City Hall in December 2016.

Feihe has been in the infant formula industry since 1954 and has six manufacuring facilities in China.

Feihe is cooperating with Canada Royal Milk to build the new plant so it can access the same government funding available to domestic processors.

Feihe has been approved for two federal programs — the milk access for growth program, which allows it to buy milk, and a matching investment fund, which offers non-repayable contributions to firms that innovate.

Feihe’s new plant has been under construction since June and is set to be fully operational in late 2019. Some 20 percent of the plant’s products will stay in North America, with the rest exported to China.

“It will produce up to 60,000 tons of dry infant food annually, using milk from Canadian farms,” Leng said.


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