All of our infant formula products come from dairy farms’ premium quality raw milk. In 2007, we began construction on two international accredited dairy farms in Gannan and Kedong. Gannan Farm and Kedong Farm currently house a total of approximately 19,000 Australian Holstein cows, each of which, on average, provides us with 8-10 tons of milk per year on average. We expect that each of the dairy farms will have annual capacity to source up to 70,000 tons of fresh milk per year. With an agreement to sell these two dairy farms, we have built up strategic alliance with professional company obligated to maintain the quality standards we have established and to exclusively provide milk to us. Our dairy farms’ raw milk quality is much higher than national and European standards.

We went through nearly a decade of efforts to have successfully completed an advanced European and North American Style vertically integrated model. This model gives us control over our products’ quality from the feeding of dairy farms cows to accessing high quality raw milk which we believe is the most important factor to producing the best infant formula. We are now in a position to move forward in the coming years to focus on our core business of infant formula manufacturing, sales and marketing through improving R&D, marketing, channel distribution, customer service, and brand equity to enhance our long-term leadership position within China's infant formula industry.

In addition, we have entered into supply contracts with numerous small dairy farmers that have provided us access to over 200,000 cows that provide milk to our over 200 company-owned milk collection stations. On average, each cow provides four tons of milk per year, which farmers deliver to our milk collection stations.