American Dairy has posted an “exceptional” growth rate for the first-quarter with increases in net income and sales.

Net income for the period increased to US$27.8m from $7.3m in the comparable period of 2008.

Sales increased 191.1% to reach $113.8m. The company put the performance down to its expanding market areas and distribution network through China. The figure was also boosted by an increase in sales quantities of the company’s high profit margin products, such as infant formula and other milk powders.

Specifically, milk powder sales increased to $107.6m, and contributed to 94.5% of total sales in the first quarter.

Leng You-Bin, CEO said: “Our first quarter 2009 sales reflect consumers’ flight to quality at the height of the melamine crisis in China. Feihe’s consistent quality standards, trusted brand name, secure raw milk supply and ability to meet increased demand, allowed us to drive revenue growth and report record financial results caused by the short-term disruption in the market.”

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You-Bin said the company expects the second and third quarters to trend “in line with historical results, in which we deliver year over year growth”.

American Dairy said it will enhance its distribution capabilities, strengthen its premium-quality brand awareness particularly in southern and western China and expand its production by investing in new production processes.