Meiji Holdings has set up another unit in China, a priority market for a Japanese group looking to grow overseas.

The company has established a production and sales arm in the south-eastern city of Guangzhou. The new unit will make and market milk, yogurt and confectionery. Production is set to start in Meiji’s 2024 fiscal year.

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Meiji has three businesses in China. One focuses on milk and yogurt, another on ice cream and a third on confectionery. Each business is “performing well”, Meiji said in a statement to announce the investment in Guangzhou.

The group already has a dairy production sites in China, one 800 miles further north in Suzhou, a city close to Shanghai. Another, in Tianjin in the north-east of the country, is scheduled to start production in the second half of the company’s 2023 fiscal year.

In the financial year to 31 March, Meiji booked group net sales of JPY1.25 trillion (US$11.86bn), down 0.1% on the previous 12 months. However, operating income was up 4.4% at JPY102.71bn, with net income attributable to shareholders of the parent company rising 8.8% to JPY67.3bn. Without giving details, Meiji said its sales in China rose during the fiscal year.

In April, Meiji acquired a 25% stake in AustAsia Investment Holdings for US$254.4m. AustAsia operates dairy farms in China and which supplies the Japanese group’s milk and yogurt businesses in the country.