Groupe Danone is joining forces with Chinese market leader China Mengniu Dairy Company in a joint venture to develop China’s largest dairy business.
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Mengniu will own a 51% stake in the new venture, to which Danone will bring its technology and marketing know-how.
The Inner Mongolia Mengniu Milk Industry Group started business in 1999 and today has sales of around US$1.2bn, with a listing on the Hong Kong stock exchange. It operates 20 plants in 15 provinces, making a range of liquid milk, ice cream and milk powder products.
Danone is already China’s largest bottled water packer, as well as the country’s top biscuit maker. This latest deal ensures full coverage of Danone’s business interests in the country.
China has no tradition of dairying and many of its climates are hostile to western dairy stock. Dairy consumption, for now, is a largely urban phenomenon.
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