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American Dairy Provides Business Update
Date:1/20/2009

where Feihe is the best-selling infant formula brand, and more than 700 people participated in the sales training conducted by leading industry experts.

American Dairy's Feihe operation is the first infant formula company to build its own organic dairy farms that meet international standards, with each of its two farms able to accommodate approximately 10,000 to 12,000 cows. The Company plans to continue to import Australian Holstein cows to its Gannan and Kedong dairy farms in Heilongjiang Province, which currently have over 8,000 Australian Holstein cows. The Company anticipates that each farm will provide approximately 60,000 to 70,000 tons of organic milk a year to be used mainly in the Company's branded products when becoming fully operational.

Mr. Jonathan H. Chou, Chief Financial Officer, states, "Our focus has always been on the pursuit of high quality products for consumers, and the construction of our dairy farms demonstrates the Company's dedication to that vision. An integrated strategy will ensure that our products remain the premiere infant formula manufactured in China."

Since 1962, the Company's Feihe branded products have been recognized for their quality and, in its 47 year history, Feihe has consistently passed all government quality inspections, including the recent inspections for melamine. The Company has always adhered to a quality-first standard. As previously announced, the Company's production facilities exceed consumer goods manufacturing standards and are designed to meet and exceed pharmaceutical standards. American Dairy's facilities are one of the few that have processing areas which meet a 300,000 cleanliness purification standard, which means that there are less than 300,000 dust particles per cubic centimeter of air. In a standard room, dust particles can reach over two million dust particles per cubic centimeter of air. Continuing its commitment to quality, the Company
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SOURCE American Dairy, Inc.
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