China’s Mengniu Dairy Co is to establish a RMB400m (US$48.3m) ice cream and milk production facility in Jiaozuo in Henan province comprising 12 ice cream and ten milk production lines to be operational by the end of the year.

Mengniu will use locally-produced fresh milk, with daily milk supply expected at 150 tons in 2004, increasing to 450 tons by 2005.

Morgan Stanley, CGU-CDC China Capital Partners and a Hong Kong-based venture capital company have invested a total of US$26m in Mengniu and hold a combined stake of 33%.