Yayi International, a producer and distributor of premium goat milk formula products, has broken ground on a deep-processing facility in Shaanxi Province.

The facility is designed to become the largest goat milk production base in China, the company said today (5 November), and is expected to begin production by the end of 2010.

Yayi said it is hoping the new facility will increase the company's existing production capacity in Shaanxi Province by 400%.

The new plant, which occupies an area of 79,920sq m, is based in Weinan, Shaanxi Province in northwestern China. The build will be funded using the proceeds of a US$15m private placement raised from SAIF Partners in June and cash flow from operations.

"We are delighted to take this significant step for expanding our production capacity which we expect will strengthen our leadership position in China's goat milk industry," said Ms. Li LIU, CEO of Yayi International. "We are optimistic about the demand for our goat milk products as lactose intolerance and dairy allergies are common in China and goat milk may be more easily digested by many Chinese who suffer from lactose intolerance as well as those who are sensitive to cow milk products."

She added: "Moreover, the general interest for goat milk has increased following the 2008 milk scandal, when melamine was found in various cow milk-based infant formula products in China."