American Dairy Provides Business Update( - Company Named One of China's Most I...),Health

- Company Named One of China's Most Influential Companies -

- Announces Repurchase of Additional $3.77 Million of Convertible Notes -

BEIJING, Jan. 20 /PRNewswire-FirstCall/ -- American Dairy, Inc. (NYSE Arca: ADY), one of the leading producers and distributors of premium infant formula, milk powder and soybean, rice and walnut products in China, today provided a business update.

The Company continues to increase its production output and customer support to meet consumer demand for reliable, high quality, premium infant formula products. Since the dairy scandal in China broke in September 2008, a series of food-related product inspections have been carried out by China's General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ). With more than 10 tests conducted to date, American Dairy has successfully passed all inspections. As a result, the Company's Feihe branded products continue to sell out in many areas. The Company continues to operate production facilities at full capacity 24 hours a day to keep up with demand, and additional packaging equipment has been installed.

The Company continues its dominate position in second- and third-tier cities and has accelerated its presence in first-tier cities such as Beijing. In an effort to solidify and expand its increased brand recognition, the Company has continued its aggressive nationwide marketing campaigns, with television commercials running on Chinese Central Television Channels (CCTV) 1, 2, 3 and 6, and over six provincial stations that air all across China. In a recent survey by AC Nielsen, the Company was ranked No. 1 fast growing infant formula company after the dairy crisis occurred in September 2008.

The Company also provides training and support to its growing sales and marketing team nationwide. Most recently, American Dairy hosted its annual sales conference in Henan province,
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