The Hong Kong-listed arm of Japan’s Nissin Foods Holdings has set up a venture to market products in China.
Nissin Foods Co., which was spun off from Nissin Foods Holdings in 2017, has formed the business with Liu Feng, the businesswoman who is general manager of Dachang Dongfeng Food (Shanghai) Co., a wholesaler of Japanese food and drinks in Shanghai.
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The venture, scheduled to start operations in the second quarter, will import and market Japanese food and beverages in Chinese first-tier cities.
Kiyotaka Ando, the executive director, chairman and CEO of Nissin Foods Co., said: “Formation of the JV is the group’s latest initiative to diversify products and expand distribution channels in the PRC and, in the long run, open new revenue streams for the group. It will give us a stronger foothold in Shanghai, presenting us with long-term strategic value conducive to creating sustainable returns for our shareholders. It is also part of our localisation efforts to strengthen our presence and relevance in the PRC. In the way ahead, we will continue to look for opportunities in strategic partnerships or alliances, thereby fuelling growth momentum.”
Nissin Foods Co., in which Nissin Foods Holdings owns a controlling stake, will own just short of 82% of the venture, to which it contribute around HKD18.6m (US$2.4m) in cash.
In July, Nissin Foods Co. announced a move to set up a factory in China. The plant is to be built in Zhuhai, a city in China’s southern Guangdong province.
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By GlobalDataIn the nine months to the end of September, Nissin Foods Co. generated revenue of HKD2.27bn, up 3.2% on a year earlier. Profit attributable to owners of the company jumped 27.1% to HKD211.2m.
Those numbers were published in November. The same month, Nissin Foods Holdings posted its half-year figures. Revenue was up 3.1% at JPY221.36bn (US$2.02bn). Operating profit was down 12.5% at JPY19.72bn, contributing to an 11.1% slide in profit attributable to owners of parent of JPY13.47bn.
