French animal health company Neovia in talks to buy 60% in Chinese pet food maker Sanpo
13 January 2017
French animal health company Neovia is in exclusive talks to buy a majority 60 per cent stake in Chinese pet food maker Sanpo, in order to enter into one of the fast growing market.
Founded in 1991, family-owned Sanpo is the fifth largest pet food producer in China. The company employs about 270 people, has a production plant in Tianjin and sales offices in the country's top 10 cities.
Sanpo has a strong brand image in the Chinese market and has developed recognised expertise in marketing and distribution. It relies in particular on a portfolio of products that covers all market segments and has 14,000 pet stores/shops in 31 provinces.
''The expected entry of Neovia into Sanpo's capital means our company will be able to accelerate its investment in China, with a cutting edge dry and wet new plant of over 60,000 tonnes capacity, to accompany the growth of the market and will allow it to benefit from the key expertise of a major player in the pet food and animal nutrition sector,'' said Jiang Chao, managing director of Sanpo.
Neovia is one of the major pet food players in Brazil and Mexico. The company is also present in France, Vietnam, and the Philippines, and exports its products to more than 50 countries.
Neovia, which changed its name last year from InVivo NSA, employs 6,830 people on 72 production sites in 28 countries and has annual sales of €1.6 billion ($1.7 billion).
China now has nearly 28 million dogs and 12 million cats. It has one of the highest potentials in the sector, with a national market of almost 132,000 tonnes (over 2 million tonnes in Brazil) and expected to increase by almost 65 per cent between 2015 and 2020, according Eurostat.
Globally the pet food market is worth $73 billion and has been growing steadily for several years. It is characterised by a combination of large, slow growing, highly segmented and extremely competitive mature markets like the US, the UK, and France and by the rapidly growing demand in the major emerging countries like Brazil, Mexico, Russia and China.
''The acquisition project of a majority shareholding is in line with our twofold desire to strengthen our pet food sector (over 15% of Neovia's turnover) and accelerate our development in Asia,'' said Hubert de Roquefeuil, CEO of Neovia.
''Sanpo will be able to conduct its growth projects (new plant), to benefit from strong synergies with our other activities and to rely on our massive investment in innovation, with a specific focus on the ''interactive pet line'', a pet approach that includes the extensive use of new technologies and connectivity to improve interaction between owners and their pets,'' he added.