Hong Kong listed China Mengniu Dairy Group, the nation's largest milk producer, reported a 43 percent rise in net profit in 2005.

According to the annual report of the Inner Mongolia-based company published on Monday, the group's net profit reached 457 million yuan (57.1 million U.S. dollars) by the end of 2005, 138 million yuan more than the figure of 2004.

Founded by farmer-turned entrepreneur Niu Gensheng in 1997, Mengniu's revenue grew 50 percent to 10.825 billion yuan (1.35 billion U.S. dollars)last year from 7.21 billion yuan in 2004.

The milk producer's market share in terms of sales volume increased from 22 percent in 2004 to 28.6 percent last year.

Mengniu Chief Financial Officer Yao Tongshan revealed on Monday that the company will further expand market share and production capacity this year, as the domestic dairy industry is forecast to grow 20 percent in 2006.

Yao said Mengniu will try to maintain its current profit margin, which stood at 22.3 percent in 2005, by controlling production cost, reducing production procedures and promoting new varieties of milk products.

He also explained that his company faces tough challenges posed by rising production cost, as the price of milk and sugar are soaring and labor costs are rising.

Source: Xinhua