Mengniu Dairy profit jumps despite milk shortage

Net profit at the mainland's biggest dairy producer, China Mengniu Dairy, jumped 25 per cent last year from a year earlier on record sales revenue of 43 billion yuan (HK$54 billion), although the company has faced a shortage of raw milk since July.

In the face of the supply shortage, the company said it has reduced the proportion of its output made up by products based on raw milk. More effort has been put into developing its yogurt and milk beverage business.

Since October, yogurt products made by a joint venture with French dairy giant Danone have been sold in dozens of mainland cities.

Liquid milk is still the company's primary revenue source, accounting for 37.9 billion yuan last year, a 17.2 per cent jump.

However, sales of ice cream, another pillar product, dropped 5 per cent last year.

The purchase of Yashili International, a mainland manufacturer and distributor of milk formula, brought Mengniu 1.5 billion yuan in sales and helped revenue from milk formula increase 443.5 per cent to 2.2 billion yuan.