Charles Shao Builds US-Style Dairy Giant in China

A Taiwanese-American who made a fortune in Silicon Valley has built a US-style dairy in China to help revive trust in an industry tainted by a national scandal involving adulterated milk and dairy products, according to 21st Century Business Review.

Charles Shao started Huaxia Dairy in 2003 in a Sanhe agricultural industrial park just 30 miles outside Beijing. His timing was good. By the time the melamine milk scandal began sickening and killing babies in 2008, Shao had built a herd of 5,000 producing 30 tons of milk a day.

More importantly, Shao was using state-of-the-art techniques that ensured the quality and safety of its milk, turning Huaxia into a model for China’s entire dairy industry. He pampered his cows. They sleep on soft dry sand, have regular checkups, listen to music and get regular massages. His methods were even more remarkable in a nation in which the dairy industry was made up mostly of small individuals farmers with handfuls of cows. They had little knowledge of modern dairy procedures of scientifically formulating feeds or keeping systematic detailed records.

Today Shao’s herd has grown to 12,000 — making Huaxia one of China’s 10 biggest dairies. Perhaps more importantly, Shao has built his Wondermilk brand into one of China’s most trusted. He is being courted as a partner by companies eager to hitch large-scale dairy ventures to Huaxia’s reputation for clean, high-quality milk.

Shao, 53, attributes his success to having applied to the dairy business the information technologies with which he built his first fortune.

“What is the core value of IT?,” he asks rhetorically. “When things go wrong, we can trace back steps in the process, find out the mistake and modify it. For example, if someone is infected with E. coli by drinking milk, the IT system can find during which shift the milk was processed on which day.”

He has now become interested in leveraging his experience in building Huaxia to become the guru of a dairy industry just awakening to the staggering demand created by 1.3-billion potential milk-drinkers.

“I just want to own 30,000 cows,” says Shao. “After that, I’ll just help others manage farms. I plan to manage 500,000 cows in the future.”

Charles Shao obtained a masters in science from USC before embarking on a career that has included oil excavation, clothing and real estate. As a partner of the investment firm Synergy Ventures he became involved in a series of information technology firms. Among the most successful of those investments was Applied Semantics which was sold to Google in 2003. Another is the server producer Einux, Inc., which was the biggest supplier of AMD.

After cashing out of his IT investments, Shao decided to leave his home in Santa Monica, California to go to China as a sort of retirement from IT.

“[Some friends and I] were looking into either a vineyard or a dairy farm, and I choose the dairy farm,” Shao told NBC News in 2008.

His friends thought he was joking.

“If you try to set up a technology company here, there’s pretty much competition everywhere,” Shao explained. “The idea of dairy farming is actually to bring in U.S. technologies to do technology transfer so we can teach people in China how to do dairy farming correctly.”