China Mengniu Dairy Company Limited's principal operating subsidiary – Inner Mongolia Mengniu Milk Industry (Group) Co., Ltd. (Mengniu Group), was founded in 1999. In a short period of time, it has grown into one of the leading dairy companies in China .

Today, Mengniu Group produces, markets and distributes dairy products throughout China (including Hong Kong and Macau ). The company's diverse product line includes liquid milk products (comprising UHT milk, yogurt and milk beverages), ice cream and other dairy products (such as milk powder and milk tablets).

Since its establishment, Mengniu Group has built a strong brand name in China 's dairy market. Mengniu Group's products are marketed throughout China under the proprietary MENGNIU brand, one of the leading consumer brands in China . Mengniu Group has received several awards and certifications in China for its MENGNIU brand, including “PRC Famous Trademark” and “PRC Famous Brand Product”.

The revenue of the Mengniu Group grew at a compound annual growth rate in the three-year period ended 31 December 2004. In 2003, Mengniu Group realized revenue and net income of RMB7.21 billion and RMB320 million respectively, representing revenue growth of 77.2% and net income growth of 94.3% over 2003. In 2003, Mengniu Group sold approximately 804,000 tons of liquid milk products, 79,000 tons of ice cream, and 5,000 tons of other dairy products.