After the investment, Biostime will hold a 20 percent share in ISM and have the right to nominate a candidate to ISM's board of directors.

ISM will use the investment to build a new infant formula production and packaging facility to guarantee its total capacity reaching 50,000 tons by 2016. Meanwhile, Biostime agreed to purchase 18,000 tons of infant formula from ISM per year from 2016.

Biostime and ISM started working together in 2011. Luo Fei, CEO of Biostime, said they need the steady and sufficient supply of milk from Europe.

In March, Biostime signed an agreement with La Laiteriede Montaigu, another French diary provider, to purchase at least 10,000 tons of products from the latter from 2014 to 2016. Eric Blanchard, general manager of La Laiteriede Montaigu, said they will take full advantage of their technology and research ability to provide the highest quality to Chinese customers.

To meet the need of Chinese customers' preference of imported dairy products, domestic dairy providers are attempting to seek partnerships with foreign dairy producers to broaden their market reach.

Qingdao-based diary producer Synutra International Inc., works with French dairy provider Sodiaal?and invested 90 million to set up a milk powder factory in France last year.

Beingmate, based in Hangzhou, announced the foundation of its sub-company in Ireland to enhance its partnership with Kerry Group, an Irish food ingredient and flavor supplier, in order to solve imported milk source issues.