Feihe to milk profits from new Ontario plant

OTTAWA - Feihe International Inc, a leading manufacturer of infant formula in China, said it is ramping up construction of a plant valued at C$300 million ($234 million) in the Canadian province of Ontario. The plant is expected to come onstream in 2019.

Leng Youbin, chairman of Feihe International Inc, told Xinhua in Ottawa on Tuesday that Feihe's board decided to invest and set up the plant in the city of Kingston, because of the region's natural and cultural features.

"We inspected many places, including some in the US and other parts of Canada, and came to conclusion that Kingston is very good place for production," Leng said.

Xia Xiang, economic and commercial counselor at the Chinese Embassy in Ottawa, said this would be China's biggest investment in Canada's agri-food sector so far and also Canada's largest-ever foreign investment in the field.

According to Xia, Canada hasn't made its own baby formula for more than 20 years. The Canadian Dairy Commission tried for a couple of years to find a domestic processor, but no Canadian processors were interested in expanding into baby formula.

The Canada Dairy Commission then broadened its search to European and Asian companies and early last year found its fit in Feihe: a manufacturer with over 50 years of experience and keen to expand to North America.

Feihe has been in the infant formula industry since 1954 and has six manufacturing facilities in China.

Feihe's new Canadian subsidiary is incorporated as Canada Royal Milk, so it can access the same government funding available to domestic processors.

The Chinese group has been approved for two federal programs: the milk access for growth program, which allows it to buy milk, and a matching investment fund, which offers non-repayable contributions to companies that innovate.

Feihe's new plant is located in the Cataraqui Estates Business Park in Kingston. It has been under construction since June and is expected to be fully operational in late 2019. Some 20 percent of the plant's products will stay in North America, with the rest exporting to China.

"It will be Canada's first and only wet infant formula facility and North America's first and only goat milk infant formula manufacturer," Leng said.

"It will manufacture up to 60,000 metric tons of dry infant food annually, using milk from Canadian farms."

Xinhua