Speaking at the announcement of Kerry Group’s half-year results, chief executive Stan McCarthy said Chinese demand for infant formula will continue to grow, particularly in light of the end to the one-child policy.

McCarthy said Kerry Group is seeing double-digit growth in the Chinese market and is in the process of building a large manufacturing facility there.

“We’re very optimistic on China and we’ve been investing hugely in the market,” he said.

McCarthy added that while the country remains a growth market, there is a regionalised divergence in terms of import demand.

He said the tier 1 and 2 cities (Shanghai, Beijing etc) are performing well but affordability and demand are issues with smaller tier 3 and 4 cities in the country.

Chinese dairy imports increased almost 30% in the first half of the year in volume terms but prices were weak. With signs of prices moving upwards, it will be interesting to see how Chinese import demand performs in the second half of 2016.

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