Chinese infant formula maker Beingmate has announced plans to invest a total of CNY155m (US$25.4m) in the construction of a large-scale dairy farm.

The company said the move would secure the supply of “high-quality milk” for its infant formula operations.

The farm will house 4,400 head of cattle and is expected to produce 23,800 tonnes of milk annually, the company said in a statement yesterday (15 August).

The move comes as the infant formula category in China comes under increasing scrutiny. In a bid to improve safety standards and consumer confidence in the quality of domestic products, regulators have stepped up oversight of the production process.

In what has been termed a “dual approach” Beijing is also pushing for consolidation in the industry. According to local reports, the Ministry of Industry and Information Technology (MIIT) has indicated that it hopes to reduce the number of manufacturers to 3-5 firms with revenues exceeding CNY50bn by 2018.

In a separate announcement, Beingmate said first-half operating profit rose 25.2%, while net profit was up 94.2% in the period.

Last week, a government investigation ruled Beingmate was among a clutch of producers that had fixing formula prices in China. However, Beingmate was in a group of three firms, including Nestle, which were not fined after co-operating with the probe.