This press release is an interesting look at how business looks at the formula industry, and how marketing is so important, especially to a new brand.  I find it interesting that this Chinese company named themselves "American Dairy" and infant formula is their main growth product.  28% increase in sales volume in one year is huge.  It also currently pays no income tax.
I've noted a few interesting points below.  
I also note an item on Nestle's strategy in China.
Janice Reynolds



American Dairy Reports Fourth Quarter and Full Year 2005 Financial Results 
BEIJING--(BUSINESS WIRE)--March 30, 2006--American Dairy, Inc. (NYSE Arca:ADY), one of the leading producers and distributors of milk powder and soybean products in China, today announced fourth quarter and full year 2005 financial results. 

http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20060330005360&newsLang=en


Leng You Bin, Chief Executive Officer and President of American Dairy stated, "We experienced continued sales momentum in 2005 with a 28% increase in sales volume from the year before, driven by our leading Feihe brand infant formula. We remain committed to making Feihe the premier infant formula brand in China as more and more mothers realize the benefits and importance of infant health." 

<snip>

The increased popularity of the Feihe brand in mainland China, reflecting American Dairy's successful advertising campaigns and extensive network of direct sales personnel through the PRC, continued to drive revenue growth in the fourth quarter

<snip>

American Dairy did not incur income tax during the fourth quarter of 2005, as the company is currently exempt from corporate income tax through 2009. Additionally, the Company receives economic incentives from certain Chinese provinces in the form of VAT tax rebates. These rebates positively impacted other income by $2.2 million in 2005. 

(see link for full article)




Nestle in China
Nestle confident of growth recovery in China
http://www.ap-foodtechnology.com/news/ng.asp?id=62268

The Chinese market is key to Nestle's growth strategy.
Sales in the country grew 20 per cent on average excluding currency and acquisition effects over the past five years compared with food-industry growth of 10 per cent, according to Brabeck. 

Swiss food giant Nestle has stepped up its marketing in China to win back customers after its recall of milk powder products earlier this year.

(see link for full article)

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