Nestle to acquire 60-% stake in China's Yinlu Foods
19 April 2011
Nestlé, the world's biggest food company, is acquiring a 60-per cent stake in Yinlu Foods group of China, for an undisclosed sum. The deal is subject to regulatory approvals.
Family-owned Yinlu is an established household name in China and a leading marketer of ready-to-drink peanut milk and canned rice porridge. It is also a co-manufacturer for ready-to-drink Nescafe coffee in China.
''We will submit this partnership proposal to the Chinese authorities shortly,'' said Paul Bulcke, CEO, Nestlé. ''It demonstrates our long-term investment in China and our commitment to further developing local brands.''
Yinlu, which reported sales of $840 million in 2010, complements Nestlé's existing product portfolio in the country, which includes culinary products, coffee, confectionery, bottled water, milk powder and products for the food service industry.
''This partnership represents a very important landmark in Yinlu's long-standing aspiration to be a relevant and favourite brand for consumers,'' said Chen Quingyuan, chairman, Yinlu, who will continue to lead the company. ''Nestlé's proven expertise will undoubtedly provide solid support for Yinlu's continued growth. Together we will continue to develop our brand and manufacturing capabilities, in particular in the Central and Western part of China.''
Nestlé, which has been present in China for over 20 years and reported sales of $3.12 billion in 2010 in the region, operates 23 factories, two R&D centres and employs 14,000 people. The Swiss multinational buys fresh milk from thousands of farmers across the country, and helps them improve quality and enhance efficiencies.