Jan. 8, 2007 (China Knowledge) – ACTIS Capital LLP, Morgan Stanley and Goldman Sachs Group Inc are betting on the dairy industry in China by buying over over one-third of Hunan Taizinai Group for US$73 million.

The three overseas firms purchased preferred shares equivalent to a combined stake of about one-third in Hunan Taizinai. After the sale, more than 60% of the firm's equity will remain held by Chairman Li Tuchun and by senior management.

Hunan Taizinai, which is planning an initial public offering overseas this year, plans to use proceeds from the sale to finance two processing sites it is building in Kunshan in Jiangsu Province and Chengdu in Sichuan Province. The Hunan-based dairy company is also seeking to sell shares in Hong Kong or New York sometime this year. 

The buying into the dairy company is seen as the foreign investors’ belief that China's demand for dairy products, which more than doubled to 25 million tons in the five years to 2005, holds great potential.