American Dairy, Inc.: New Soybean Powder Mill Increases Capacity by 350%.

HEILONGJIANG PROVINCE, China -- American Dairy, Inc. (OTCBB:ADIY), one of the leading producers and distributors of milk powder and soybean products in China, today announces completion of their new soybean powder mill.

"China's soybean market is substantial," Roger Liu, ADIY's CFO announced. "Domestically, it is a $1.5 billion industry and growing at a rate of 20% per year."

The 37,674 sq. ft. soybean mill is a part of American Dairy's new 10 acre milk processing plant in Kedong County, Heilongjang Province, China. This workshop is a $3 million investment which will increase production capacity by 350%. By adopting Japanese technology and efficiency, American Dairy will be capable of processing an additional 5,000 tons of high quality, soybean powder annually, bringing production capacity to a total of 7,000 tons.

"We have access to an abundant amount of the highest quality, raw soybean available," Leng You-Bin, ADIY's chairman and CEO stated. "Heilongjang Province is one of the largest harvesting locations in the world."

Soybean powder sells at an average price of $1,400 per ton," said Mr. Liu. "We will see additional revenue from our soybean powder operation; production is expected to be near full capacity in 2005."

Soybean is the fourth largest crop after rice, wheat and corn. In China there are the following three soybean production regions:

--1. Northern Spring Sowing Region is the largest region of soybean production in China. In this region are the provinces of Heilongjiang, Jilin, Liaoning and Inner Mongolia. The planted area of soybean in this region reached 3.5 million ha. Total soybean production in this region occupies about 45% of the whole of China.

--2. Northern Summer Sowing Region is the second largest soybean area in China. The provinces of Henan, Shandong, Hebei, Anhui are in this region. Planted area and production of soybean in this region occupies about 30% of the whole of China.

--3. Southern Poly-Cropping Region. In this region, planted area and total production of soybean occupies about 20-25% of the total in China.(1)

CORRECTION:

In a previous press release dated, April 12, 2004 titled, "American Dairy Reports FY 2003 Net Income Increase of 526%", the company reported:

"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."

The company made a reporting error; the new soybean facility does not have a capacity of 20,000 tons instead it is capable of processing 5,000 tons annually. Only the milk powder facility will be capable of processing an additional 20,000 tons annually.

Certain of the statements made herein constitute forward-looking statements that involve risks and uncertainties. In such instances, actual results could differ materially as a result of a variety of factors including the risks associated with the effect of changing economic conditions at home and abroad, variations in cash flow, reliance on collaborative retail partners, and on new product development, variations in new product and service development, risks associated with rapid technological change, and potential of introduced or undetected flaws and defects in products and services and other risk factors detailed in forms filed with the Securities and Exchange Commission from time to time.

(1) http://www.gsf99.uiuc.edu/invited/1_1_01.pdf