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How Should Regional Dairy Companies Succeed in an Ara When Milk Source Is Everything?

2020-8-11 10:18:42 Comments:0 Views:61 category:SDDDC News

Since 2008, domestic HTST milk market has ushered in a period of rapid development. After more than ten years of development, the total market revenue of HTST milk reached 43.1 billion yuan in 2018, representing a year-on-year increase of 16% (Nielsen Research Data). Since 2019, major dairy companies have launched new fresh milk products with an emphasis on the HTST milk, and those products have gradually entered local markets.

Professor Shengli Li, Director of Sino-Dutch Dairy Development Center (SDDDC), and Professor of China Agricultural University, pointed out that the current structure of China's dairy industry is relatively stable. After reforms of supply-end and upgrading of products, the concentration ratio of dairy industry and the quality of products have both improved, and the HTST milk market will enter in a period of high-speed development. If the output of HTST liquid milk increases at a rate of 10-15% annually in future years, the annual production will reach 10 million tons in 2025, doubling that of this year. The growth demands a significant daily increase of raw milk supply of 14,000 tons. However, the long-existing imbalance in regional raw milk yield between the north and the south has not been solved. According to statistics, the daily yield of raw milk in the six southern provinces only accounts for 4.6% of the country’s total daily output. Therefore, regional dairy companies in the southern region must accelerate their build of milk production bases; this is the key to break through the bottleneck of their development and increase their competitiveness in the market.

As a leading regional dairy company and a traditional HTST milk producer, Guangdong Yantang Dairy Co., Ltd. (hereinafter Yantang Dairy) has been in dairy industry for over 60 years. The company owns 3 dairy farms which, in total, supply 30% of the raw milk needed for its production, a ratio higher than the average level of regional dairy companies. Yantang Dairy has significant advantage over other regional dairy companies in terms of milk supply.

In order to further integrate resources and give full play to the advantages of Yantang Dairy, SDDDC and Yantang Dairy jointly established the first SDDDDC Training Base in South China on August 10, 2020. This cooperation aims to achieve a win-win situation for both parties, coordinate the interests of raw milk producers and the milk processing companies, and accelerate the progress of technological research, development and innovation capabilities in domestic dairy industry.

       Professor Shengli Li, Director of Sino-Dutch Dairy Development Center (SDDDC), and Professor of China Agricultural University, delivered the first lecture in the SDDDDC Training Base – Yantang Branch

In his speech, Professor Shengli Li mentioned that, since the outbreak of COVID-19, the overstocking of dairy products, the surplus of raw milk supply, the increase in production costs due to dry spraying, the shortage of feed, and the price increase in production materials, have brought huge challenges to China’s dairy industry. However, at the same time, the pandemic has also deepened the domestic consumers' awareness of the nutritional value of dairy products. That the Chinese government listed milk as one of the key relief supplies for locked-down areas during pandemic also promoted the dairy industry. Since March, the domestic dairy industry has recovered rapidly with growth in production, processing, sales and other aspects. According to statistics from the Ministry of Agriculture and Rural Affairs, the milk yield in the first six months of 2020 reached 1438 Million tons, an increase of 7.9% year-on-year. The statistics of listed companies shows that most companies have significantly increased their production of HTST and UHT milk. The increase in production leads to the growth in demand for raw milk supply. Yantang Dairy, based in Guangdong, marketing in South China, has reached remarkable achievements with its differentiation strategyt over the years. In terms of raw milk source, Yantang Dairy, as a leading diary company in South China, owns 3 dairy farms, which in total satisfy 30% of the company’s raw milk demand. Its dairy farms set a standard for dairy farming in hot and humid regions. The foundation of the SDDDC Training Base in Yantang this time showcased the cooperation between industrial leaders, and will help the dairy farming in South China to step into a new stage.

Xuan Huang, Secretary of the Party Committee and President of Yantang Dairy, praised SDDDC for promoting the continuous upgrading of China’s dairy industry while facilitating the communication and cooperation in the dairy industry between two countries. SDDDC has been playing an increasingly important role in the development of domestic dairy industry.

Milk source is the base for the revitalization of dairy industry. As the only D20 (the top 20 domestic dairy companies) company in South China, Yantang, has always been devoted to intensive, standardized, and efficient dairy farming, and has built a high-standard, high-quality milk supply system. At the same time, Yantang Dairy has also established a milk supply model of "company + partner dairy farms", building strategic cooperation with more than ten large-scale farms. To promote the advanced farming techniques, Yantang Dairy provided technological, financial, and managerial supports for the partner farms. Those supports have benefited not only the partner dairy farms, but also the regional dairy farming in generally.  In addition, Yantang Dairy insists that good milk comes only from happy cows fed with good grass. Therefore, the company has also worked for the integration of planting and cow raising, taking the lead in including the uppermost link of the industrial chain – grass growing – to its business. This strategy not only guarantees the quality of forage; it also boosted the employment and income of local farmers, and played a positive role in the development of agriculture and rural areas as well as the revitalization of the countryside. The establishment of the SDDDC Training Base at Yantang Dairy is an acknowledgement of its positive influence on the industry and the local community. This also gives Yantang Dairy an opportunity to further its efforts in building a leading regional dairy company and giving back to local community.

As introduced by Li’ke Feng, Deputy Secretary of the Party Committee and CEO of Yantang Dairy, the company was founded in 1956. It is now a public agricultural business under the direct management of the Ministry of Agriculture and Rural Affairs,the first publicly listed producer of liquid milk in Guangdong, the company that holds the positions of Deputy President of Dairy Association of China and Deputy President of China Dairy Industry Association, a member of IDF (International Dairy Federation) China Committee, one of the Top 20 domestic dairy companies (D20), and a strategic partner of SDDDC. In 2004, Yantang Dairy first put forward the concept of “from grass to glass”, and since then, the company has been committed to building an integrated industrial chain in South China. Upgrading the milk supply system is an important step of it. In 2010, Yantang Dairy built Yangjiang Hongwuyue Dairy Farm, the first national-level self-owned demonstration farm; in 2013, it built Zhanjiang Yantang Aoxin Farm, the southernmost large-scale farm in the mainland, through merger and acquisition. Its Lufeng Aoxin Farm, the largest A2 demonstration farm in South China, where the SDDDC Training Base is located, was put into use in June 2020 after over two years of construction since 2017. The average annual milk yield of milking cows in Yantang Dairy’s farms is 9 tons per cow, which is the leading level in the southern region.

According to James Su, Secretary General of SDDDC, the Center borrowed the training mode from the Dutch dairy industry. The “Cow University” training program launched in 2013 focuses on the interactive teaching and practice, and integrates hands-on activities with theories. Every student in the program is given the opportunity to communicate freely with the experts, which ensures they will get the most from the training. SDDDC also provides a variety of other trainings on all fields of dairy industry. Up to now, SDDDC has held 23 sessions of "Cow University" training courses, 14 sessions of “Cow Signal Trainers” training program, 3 advanced training sessions on dairy quality and safety, 2 in-depth training sessions on farm operation and management, and 4 professional courses for dairy nutritionists. So far, 881 people have received trainings from SDDDC, among whom 220 obtained certificates for professional cow signal trainer, and 70 became dairy nutritionists. Those trainers are spreading the concepts and skills to others in the industry, contributing to the development of China’s dairy industry.


Guests Attending the Opening Ceremony

SDDDC Team

Shengli Li, Director of SDDDC, and Professor of China Agricultural University

Yachun Wang, Professor of China Agricultural University

James Su, Secretary General of SDDDC

Hanbin Qiao, Dairy Development Manager of Royal Friesland China

Lei Liu, Manager of CRV China

Kai Liu, Manager of SDDDC

Xiaoyan Ma, Assistant of SDDDC


Yantang Dairy Team

Xuan Huang, Secretary of the Party Committee and President of Guangdong Yantang Dairy Co., Ltd.

Limin Xie, Deputy Secretary of the Party Committee and Deputy President of Guangdong Yantang Dairy Co., Ltd.

Li’ke Feng, Deputy Secretary of the Party Committee and CEO of Guangdong Yantang Dairy Co., Ltd.

Chunfeng Li, Deputy CEO and Secretary of the Board of Directors of Guangdong Yantang Dairy Co., Ltd.

Hankui Wu, Director of Farming Department of Guangdong Yantang Dairy Co., Ltd.

Yuhai Ding, Manager of Milk Supply Department of Guangdong Yantang Dairy Co., Ltd.


After the opening ceremony, guests and students toured Yantang Dairy Factory.

On the same day, Hanbin Qiao, Dairy Development Manager of Royal Friesland China, Professor Wang Yachun of China Agricultural University, Lei Liu, Manager of CRV China, and James Su, Executive Director of East Rock Farm Technologies Technology Co., Ltd., presented their reports respectively on "Dutch Dairy System”, "Quantification of Cow Behavior – A Powerful Tool to Fight Against Heat Stress”, "How to Breed Profitable Cows" and "Common Mistakes and the Right Measurements of the Use of Wind and Water Against Heat Stress ".

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