Heilonjiang Province, China - American Dairy Reports FY 2003 Net Income Increase Of 526%

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American Dairy, Inc. (OTC BB: ADIY), one of the leading producers and distributors of milk powder and soy bean products in China, today announces that is has filed its Form10-KSB with the SEC.

American Dairy, Inc. (OTC BB: ADIY), one of the leading producers and distributors of milk powder and soy bean products in China, today announces that is has filed its Form10-KSB with the SEC.

Net income increased by 526% from $325,257 in 2002 to $2,036,807 for 2003. This increase in net income is attributable primarily to the following factors: (1) a 57% increase in sales; (2) a 23% increase in gross profit margins from 35% in 2002 to 58% in 2003; and (3) a 141% increase in distribution expenses, offset in part by: (i) a 113% increase in general and administrative expenses, and (ii) a $333,020 increase in enterprise income tax expense.

Revenues increased by $6,886,542 or 57% from $12,172,815 in 2002 to $19,059,357 in 2003. This increase was due primarily to expanding market areas and adding new value added products. Unit sales prices remained constant during the year.

"Our goal by the end of this year is to achieve a substantial growth across the board,” stated Leng You Bin, CEO of American Dairy Inc. “Successful marketing efforts in 2003 have helped us create greater brand awareness and as a result have achieved significant revenue growth and profitability. We are excited as first quarter 2004 net profits are expected to exceed $1,000,000.”

American Dairy acquired 40 acres of land in Kedong County, China to construct new facilities. Plans at this new site are to construct a new dairy processing plant with modern processing and packaging equipment imported from Denmark and Belgium. It is projected that the new facility will be capable of processing 300 tons of fresh milk per day increasing production of milk powder an additional 20,000 tons annually. In addition, a new 20,000 ton per year soy bean powder facility is expected to be completed by October of 2004. Heilongjiang is world renown for the production of soy bean products. The new facility will increase production capacity and meet expansion needs for the next two years.

About American Dairy, Inc.

American Dairy, Inc. conducts operations in The People’s Republic of China ("China") through its wholly owned subsidiary Feihe Dairy. Founded in 1962, Feihe Dairy is one of the leading producers and distributors of milk powder, soybean milk powder, land related dairy products in China. Feihe Dairy’s 99% owned subsidiaries Sanhao Dairy and Baiquan Feihe Dairy produce and supply processed milk to Feihe Dairy.

Forward-Looking Statements

Statements in this document that are not statements of historical or current fact constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other unknown factors that could cause the actual results of the Company to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. In addition to statements which explicitly describe such risks and uncertainties, readers are urged to consider statements labeled with the terms "believes," "belief," "expects," "intends," "anticipates," "will" or "plans" to be uncertain and forward-looking. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in the Company's reports and registration statements filed with the Securities and Exchange Commission.

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