After making a €437m investment, Danone has acquired a 25% stake in Yashili, one of China’s largest producers of infant formula. Yashili have about 5% of the Chinese infant formula market.
The transaction will allow Danone to further expand its business in China, particularly in the high-margin infant formula sector. China is Danone’s fourth-largest market and accounts for about 7% of its group sales. Imported milk powders command premiums in the Chinese market, but there is an increasing dominance of savvy local brands such as Beingmate – Kerry Group’s infant formula partner.
The deal strengthens Danone’s ties with China’s top dairy firm, China Mengniu Dairy, which is Yashili’s largest shareholder. It comes as the French firm’s key Dumex baby nutrition brand seeks to win back consumers after accusations of high prices, bribery and tainted milk scares last year.
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Last year, Danone purchased 1.2bn litres of Irish milk to be manufactured into infant formula at Macroom. This is the single largest dryer in the world with a capacity of 135,000t/annum and supplies 80% of Danone’s baby nutrition powder needs.
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After making a €437m investment, Danone has acquired a 25% stake in Yashili, one of China’s largest producers of infant formula. Yashili have about 5% of the Chinese infant formula market.
The transaction will allow Danone to further expand its business in China, particularly in the high-margin infant formula sector. China is Danone’s fourth-largest market and accounts for about 7% of its group sales. Imported milk powders command premiums in the Chinese market, but there is an increasing dominance of savvy local brands such as Beingmate – Kerry Group’s infant formula partner.
The deal strengthens Danone’s ties with China’s top dairy firm, China Mengniu Dairy, which is Yashili’s largest shareholder. It comes as the French firm’s key Dumex baby nutrition brand seeks to win back consumers after accusations of high prices, bribery and tainted milk scares last year.
Last year, Danone purchased 1.2bn litres of Irish milk to be manufactured into infant formula at Macroom. This is the single largest dryer in the world with a capacity of 135,000t/annum and supplies 80% of Danone’s baby nutrition powder needs.
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