Hua Xia has planned to expand after securing a US$106m external investment deal

Hua Xia has planned to expand after securing a US$106m external investment deal

Three Asian investors have poured a combined US$106m investment into China's Huaxia Dairy Farm to allow it to expand its farming operations and retail dairy products business.

GIC, Olympus Capital Asia and other existing shareholders including Grand River Capital are investing tranches of US$70m, US$30m and US$6m respectively.

In addition to expanding its farming bases, the proceeds will be used to further develop Huaxia's farm management technology, import additional heifers and drive the expansion of the Wondermilk brand.

Charles Shao, founder and chairman of Huaxia Dairy, said: "This financing marks another key milestone for Huaxia Dairy and will provide the capital to support our growth plans."

The firm has started construction of a fourth farm in Xinghua, which will be completed later this year. It is designed to serve Beijing and Shanghai with fresh, chilled milk.

Chin Kiong Goh, senior vice president at GIC Special Investments, added: "As a long-term value investor, we are confident in the growth prospects of the company and we look forward to working with Charles Shao, the management team, Olympus Capital Asia and the other shareholders to continue to drive the company's success in this fast-growing sector."

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Sanhe, China, July 2, 2014 – Huaxia Dairy Farm Limited (“Huaxia Dairy”), a high-quality milk producer headquartered in Sanhe, China, announced today that an investor group led by GIC, Singapore’s sovereign wealth fund, and Olympus Capital Asia, a leading regional middle market private equity firm focused on Asia, has invested an additional US$106 million in the company. The investment proceeds will be used to fund the expansion of the company’s farming operations as well as its retail dairy products business.

In this round of financing, GIC is investing US$70 million and Olympus Capital Asia is investing US$30 million. Other existing shareholders, including Grand River Capital, are investing the remaining US$6 million. Combined with its previous investments, Olympus Capital Asia has now invested $108 million in the company and is its largest shareholder.

Huaxia Dairy was established in 2004 by a group of entrepreneurs focused on creating a world-class dairy farm in China. The company currently operates three farms in the Sanhe area, just outside of Beijing, with over 13,500 cows. The milk produced at Huaxia Dairy meets international best standards and is used to supply major dairy products companies in China for their premium products, as well as for the production of Huaxia Dairy’s own Wondermilk-branded products.

To meet the rapidly increasing demand for its high-quality raw milk, the company is currently in the process of building a farm in Xinghua, Jiangsu which will be completed later this year and bring the total number of farms to four. This new location will position the company to serve both the Beijing and Shanghai markets with fresh, chilled milk from its strategically-based farms in Sanhe and Xinghua, respectively.

In addition to expanding its farming bases, the proceeds from this financing will be used to further develop the company’s industry-leading farm management technology, import additional heifers and drive the expansion of the Wondermilk brand.

Charles Shao, founder and Chairman of Huaxia Dairy, commented: “This financing marks another key milestone for Huaxia Dairy and will provide the capital to support our growth plans. We appreciate the continued support and partnership with Olympus Capital Asia and welcome GIC as a new investor.”

Peter Cimmet, Managing Director at Olympus Capital Asia and a Huaxia Dairy Board member, added: “We are pleased to have GIC join as a shareholder of Huaxia Dairy. GIC supports the company’s strategy to become the leading premium player in the China dairy market and is an ideal partner to help drive the further expansion of the company.”

Chin Kiong Goh, Senior Vice President, GIC Special Investments, commented: “We are excited to be an investor in Huaxia Dairy, a leading dairy farming company focused on the premium dairy market in China. As a long-term value investor, we are confident in the growth prospects of the company and we look forward to working with Charles Shao, the management team, Olympus Capital Asia and the other shareholders to continue to drive the company’s success in this fast-growing sector.”

Original source: GIC Investments