Chinese Mengniu Dairy Company has stated that its principle subsidiary, Inner Mongolia Mengniu Dairy, will work with Wuhan Frealth Dairy Company to develop the dairy market in central China.

A report by AFX said the two groups will jointly form a new company, Mengniu Wuhan Frealth Dairy Co. This new entity will consist of Wuhan Frealth’s entire dairy business, including its brand and trademark. Wuhan Frealth will hold 52% of the new company.

Inner Mongolia Mengiu will own the remaining 48%.

Wuhan Frealth, the single local brand in the Wuhan region, reported an annual turnover of approximately CNY200m (US$24.8m) in 2005. The registered capital of the joint venture is CMY60m.