China and Holland establish China's first infant formula milk powder joint venture

Beijing, October 8 - Dutch dairy giant Royal Friesland announced in Beijing on the 8th that it has signed a joint venture agreement with Huishan Dairy to jointly manufacture and sell infant formula milk powder in China. This is in accordance with Fonterra, Danone and Nestle. Later, another multinational dairy company set up a joint venture brand in China, and was also the first Sino-foreign joint venture to produce, promote and sell infant formula milk powder in China.

At the press conference held in Beijing on the same day, Hao Junsi, CEO of Royal Friesland of the Netherlands, said that the joint venture company will introduce a brand new infant formula milk powder product in the Chinese market and operate a fully vertically integrated infant formula milk powder supply chain. The two parties agreed that the newly created local joint venture brand milk powder will meet the needs of China's mid-tier consumer market at a price that is close to the people, and Huishan Dairy will provide milk for the joint venture. In the production and sale of milk powder, Royal Friesland of the Netherlands will provide technology and experience in formulation, technology, quality control and brand building.

Hao Yusi said that the Royal Dutch Friesland will pay 700 million yuan to get a 50% stake in Huishan Dairy Silk Factory, and will invest 30 million US dollars to buy Huishan Dairy Stocks on the Hong Kong Stock Exchange.

Yang Kai, CEO of Huishan Dairy, stated that China's infant formula milk powder market is an attractive and fast-growing market. The combination of the two parties will ensure that the joint venture company fully controls the entire process of procurement, production, promotion and sales. The joint venture between Huishan Dairy and Royal Friesland in the Netherlands is in full compliance with the latest food safety regulations and policies of the Chinese government. The purpose of the joint venture is to ensure the strictest quality control of infant formula milk production from the entire supply chain.

Royal Dutch Friesland is one of the five largest dairy products companies in the world, with a history of more than 140 years. In 2013, its sales revenue was 11.4 billion euros, accounting for 80% of the national milk production in the Netherlands. Among the top five dairy giants in the world, Nestlé, Danone and Fonterra have successively established joint ventures for the production of milk powder with Chinese domestic companies. With the deep cooperation of the Royal Dutch Friesland and Huishan Dairy, the local joint venture brand market for infant formula milk powder in China may present a “four-strong competition”. "The situation.

According to data from ACNielsen's market research, in 2013, the sales volume of China's milk powder market was 60 billion yuan. With the release of favorable policies such as the release of a separate second-rate child, industry insiders analyzed that in 2018, the size of this market will reach 100 billion yuan. The Chinese market will undoubtedly become the largest infant milk powder market in the world.