France - China

French giant Danone announces deals in China amid boom in dairy demand

AFP/Philippe Lopez

French food industry group Danone on Monday announced deals in China as demand there continues to grow for dairy products.


The world leader in the dairy food industry is to invest about 325 million euros in two joint ventures with Chinese interests.

Danone is to work with Cofco, a Chinese state-owned food industry company, opening the way for a strategic partnership with Mengniu, a Chinese dairy product company.

Initially, Danone will hold 4.0 percent of Mengniu, with the intention of increasing this stake in line with future market conditions, the French firm said.

The second venture will be linked directly to operating activity.

The venture will group assets from the two companies with the hope of achieving total sales of around 500 million euros, benefiting from the two brands, Danone and Mengniu.

Danone said this could deliver 21.0 percent of the Chinese market and would involve 13 factories in China.

The two companies hope to gain from Danone’s reputation for quality in China combined with Mengniu’s vast distribution network.



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