China’s largest organic dairy company, Shengmu Organic aims to raise US$169 million through an initial public offering (IPO) in Hong Kong. The funds from the offering, which will remain open through July 7th, will be used to fund the expansion of the dairy’s milk production. One quarter of the funds will go toward the construction of six new dairy farms over 18 months, and 30% of the funds will be used to increase the size of the dairy herd by 15,000 through 2014 and 2015. The remainder of the funds will be used to upgrade the company’s processing capacity. One tenth of the shares will be offered in Hong Kong and the remainder will be offered internationally. Hua, a subsidiary of COFCO has already offered to buy US$30 million worth of shares. Currently a good deal of Shengmu’s business is supplying raw milk to companies such as Mengniu, Yili, and Want Want, however Shengmu is increasingly processing its liquid milk under its own Shengmu brand.
To receive relevant news stories with summaries provided by GAI Research & Insight, subscribe to Global AgDevelopments, our free weekly enhanced eNews service