Shengmu Organic Milk heads for HK

China Shengmu Organic Milk Ltd, the largest organic dairy company in China, is expected to list on the stock exchange in Hong Kong on July 15.

The company, which has a 54.2 percent market share in China based on its organic raw milk production volume in 2013, has 30,621 organic cows and 29,836 nonorganic cows.

It has 13 organic farms in desert regions and 12 nonorganic farms in Inner Mongolia autonomous region.

It has another three farms under development, which are expected to open by September. And it expects to add 18 farms by the end of 2016.

Song Liang, an industry analyst, said raising cows in the desert and keeping the desert green are environmentally friendly, a practice that receives strong support from local governments.

Also, organic liquid milk, which generates higher profits than other kinds of milk, is a solution to the rising domestic demand for high-end dairy products, Song said.

The organic raw milk market accounted for 0.5 percent of the total raw milk market in China by volume in 2013. Its share will reach 3.2 percent by volume in 2018, according to a market report.

Retail sales of organic liquid milk reached 1.9 billion yuan ($306 million) last year, about 1.3 percent of the total liquid milk market.

High-end liquid milk market accounted for 28.8 percent of the total liquid market in terms of retail sales in 2013.