Yayi International to Build China's Largest Goat Milk Production Base

The new facility is designed to become the largest goat milk production base in China. Once put into production at the end of 2010, the new facility will increase the Company's existing production capacity in Shaanxi Province by 400 percent.

6 Nov 2009 --- Yayi International Inc., the leading producer and distributor of premium goat milk formula products for infants, toddlers, and adults throughout the People's Republic of China, announced that it broke ground on a new deep-processing facility in Shaanxi Province.

The new facility is designed to become the largest goat milk production base in China. Once put into production at the end of 2010, the new facility will increase the Company's existing production capacity in Shaanxi Province by 400 percent. The new plant, which occupies an area of 79,920 square meters, is based in Weinan, Shaanxi Province in northwestern China, where dairy goats are abundant and of optimal breed for milk production. The Company expects the new facility to be funded using the proceeds of the $15 million private placement raised from SAIF Partners III L.P. in June 2009 and cash flow from operations.

"We are delighted to take this significant step for expanding our production capacity which we expect will strengthen our leadership position in China's goat milk industry," said Ms. Li LIU, Chief Executive Officer of Yayi International. "We are optimistic about the demand for our goat milk products as lactose intolerance and dairy allergies are common in China and goat milk may be more easily digested by many Chinese who suffer from lactose intolerance as well as those who are sensitive to cow milk products. Moreover, the general interest for goat milk has increased following the 2008 milk scandal, when melamine was found in various cow milk-based infant formula products in China."