The supply agreement, initially set for a three-year duration, is an indication of the growing demand for probiotics in China, said China-Biotics chief executive officer Jinan Song.
The firm said for the time being it will supply the ingredients from its existing manufacturing plant.
However, in order to meet the demand for probiotics additives, the China-Biotics plans to build a new, 150-metric-ton production facility.
The new plant, which the company says will significantly increase its capacity to meet the expected demand for bulk additives, is set to start production during the latter part of the 2008 calendar year.
"We are very pleased to establish this partnership with Bright Dairy, one of the top three producers in China's dairy industry," said Song.
"This is a significant milestone for us, marking the first time we sell probiotics as food additives; and this contract further validates the demand for probiotics food additives in China.
With the increasing affluence and health awareness of Chinese consumers, we believe that the demand for probiotics additives is growing rapidly."
Probiotics are live bacterial strains that are generally understood to deliver digestive benefits in the gut.
An increasing awareness of their health benefits has helped boost demand for the ingredients, with the probiotic ingredient market currently estimated to be worth more than €437m ($600m) - and growing at a rate of 10 - 20 per cent per annum.
And as the awareness and popularity of the ingredients increases, industry and science organisations continue to conduct research into additional benefits of probiotics, which promises to boost their popularity further.
Just this month, researchers from the Academic Medical Centre in Amsterdam reported that probiotics may boost the number of bowel movements and relieve constipation.
Writing in the Nutrition Journal, the scientists stated that previous studies with single strains showed conflicting results, and that a mixture of Lactobacillus and Bifidobacteria strains may hold the key.
"Given their safety profile, probiotics could be an attractive compound to manipulate gastrointestinal motility in constipated children," wrote lead author Noor Bekkali.
Another recent study by researchers from Imperial College, London, reported a 22 per cent drop in the number of cases of diarrhoea if probiotic drinks were consumed by hospital-bound elderly patients receiving antibiotics ( British Medical Journal , doi:10.1136/bmj.39231.599815.55).
Most foods containing probiotic bacteria are found in the refrigerated section of supermarkets, as the bacteria is destroyed by heat and other processing conditions.
This has given the dairy sector, already used to handling live bacteria for the manufacture of yoghurt, a major advantage in probiotic foods.
Probiotic drinking yoghurts, for example, are currently the fastest growing dairy product in Europe.
Increasingly, research has also focused on expanding the protection of probiotics during processing, as well as expanding the food categories available to prebiotics.
Such an avenue of research has led companies like Cell Biotech from Korea to use a dual-coating to protect probiotics against oxygen, acid, moisture and high temperatures for use in emerging new product categories such as breakfast cereals and smoothies.
Other approaches are also being explored, with scientists looking at improving probiotic viability by using whey protein gel particles, or prebiotic fibres.