Chinese sanitary napkin to tissue paper maker Hengan International Group Co is reportedly considering selling off its snack unit, Fujian Qinqin Foodstuffs.
According to a Bloomberg report, which cited unnamed sources, the business could fetch in the region of US$300m. Hengan is said to have appointed Bank of America to act as its advisor in the process.
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Hengan acquired Fujian Qinqin Foodstuffs in 2008. The company did not immediately return requests for comment on the potential disposal.
According to Hengan's most recent financial statement, for the six months to 30 June, the proportion of snack sales as part of the group's total revenue has dipped from 7.8% to 7% year-on-year. The business generated sales of HKD869.9m (US$112.2m) in the period, down 8.1% on the year, and a profit of HKD35m.
The company said that because snack products are not "daily necessities" sales were impacted by the economic slowdown in China. However, the group insisted that the long-term prospects for the business are positive and Hengan focused on broadening its portfolio. "As quality of living in China improves, the group believes that the snack business will keep booming in the long term," Hengan stressed.
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