Emerald Dairy, a Chinese milk processing company, has announced that it has begun construction of a new milk powder processing facility in Hailun City of the Heilongjiang province, China.

Upon completion in early 2009, the new facility will have an annual production capacity of 9,000 tons of milk powder, bringing the company’s total annual production capacity to approximately 18,000 tons by the end of 2009. The company has secured milk supply from local farmers for the facility.

According to the company, the new facility will provide it with the flexibility to accommodate future production of an additional 9,000 tons as market demand grows. The project will require an investment of approximately $20 million, which the company intends to finance through internal cash flow as well as potential debt or equity offerings.