China Food

Yili milk powder acquired another city, this time an asset of fisland in China

Following the holding of Aoyou, Yili recently “added the fislan milk powder factory in China to the shopping cart”.

Xiaoshidai noticed that recently, Dutch media reported that Yili and Royal Netherlands fisland had reached an agreement on the acquisition of the latter’s infant nutrition production base in Xiushui, Shenyang. The transaction is expected to be completed by the end of 2022, and fisland did not further disclose financial details.

It is worth noting that this base is the only infant milk powder factory of fislan in China, which is responsible for the production of “child mother” series products.

Today, fislan confirmed the above transaction plan to xiaoshidai, and said that its professional nutrition business will focus on the brand of Americana, ultra-high-end product innovation and digital improvement. At the same time, the professional dairy products business mainly serving catering customers and the ingredients business providing products and services to large and medium-sized dairy enterprises will continue to be deeply rooted in the Chinese market.

Focus on Meisu Jiaer

According to foreign news, the sale is the result of the strategic evaluation of fisland. The company is working with Yili to ensure a smooth transition, and 270 employees will be transferred to Yili and retain their jobs.

“Fisiland will continue to be active in the Chinese market, but will fully focus on the massol Kerr series.” Feishilan’s strategic evaluation shows that maxol Kerr can bring high added value to the business portfolio, and focusing on the brand is conducive to achieving the best growth, feishilan wrote.

Xiaoshidai said that fisiland announced the strategic review of beauty beauty in December last year, and the news of bidding continued to spread in the process. However, after evaluation, the company still decided to retain Mercure Kerr, saying that the business “remains an important part of the business portfolio of fisland” and will focus on China, Greece, Malaysia, Mexico and Vietnam in the future.

The evaluation conclusion also pointed out that the professional nutrition business group in charge of infant milk powder will pay full attention to the brand, innovation and further digitalization in the high-end field.

It is worth noting that in China, in addition to the imported beauty beauty, fislan also owns the domestic baby powder brand “Zi Mu”, which is produced by the Xiushui factory sold this time, focusing on the sinking market. Xiaoshidai inquired the website of the State Administration of market supervision that the three formulas approved by the factory are all “child mother” brands.

Xiaoshidai learned from dealers who are familiar with the “child mother” infant formula that fislan had communicated that the “child mother” customer service hotline would continue to provide customers and consumers with the required services until the transaction was completed. From the discussion of the company in recent years, the “child mother” baby matching series products have rarely appeared, and more is to introduce other “child mother” product lines, such as adult milk powder, children’s milk powder, children’s cheese.

Although the powder preparation for children, mothers and infants has been quite “low-key”, its production factory still has actions.

According to the local government work report in 2021 found by xiaoshidai, fislan dairy completed the upgrading of its production line during the period. Xiaoshidai also saw on the recruitment website today that the factory released the recruitment information of chemists and online inspectors on July 12.

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Commenting on the sale, a person familiar with the milk powder industry said to xiaoshidai today that for fisland, this will well release the effectiveness of China’s business resources and more easily promote the implementation of global strategies in China.

He also believed that the contact between Yili and fislan was not unexpected. “Previously, fisland and Wageningen University in the Netherlands participated in the launch of the Sino Dutch dairy development center. At that time, Yili was an important member of China’s dairy industry. The two companies had a lot of interaction, and the relationship was good.”.

Yili makes another move

As for the buyer’s idea, another person who has been engaged in the milk powder industry for many years guessed that the business of Yili infant milk powder is developing rapidly. If the production capacity and formula quota should also quickly keep up, acquisition is a more ideal choice.

“Now it is difficult to build a new milk powder factory in China. It takes several years to complete the process from factory declaration to formula registration.” He pointed out to xiaoshidai that according to Yili’s idea of positioning itself as a world-class dairy enterprise, its infant milk powder business should take Feihe, China’s largest infant powder company, as a reference.

“Yili infant milk powder now has a volume of more than 10 billion. If it is compared with Feihe, it will almost double. Then the production capacity must also keep up with it. If the purchase price is suitable, buying a factory now may be faster than building or expanding.” The person said.

Including the fislan factory, Yili has launched the purchase of infant milk powder again in less than a year.

In October last year, Yili announced the acquisition of 34.33% shares of Aoyou and became the single largest shareholder of Aoyou. This transaction is also the largest investment merger and acquisition between Chinese dairy enterprises in 2021. By the end of the tender offer in March this year, the shareholding of Yili had increased to about 59.17%, becoming the controlling shareholder of Aoyou.

“We hope to make use of Yili’s advantages to coordinate in procurement, marketing, operation and other aspects, and fully empower it through this coordination, improve the operation ability of Aoyou and enhance the integration ability of the import line market.” Yili executives said at the performance meeting held in April this year that Yili is very confident that it can occupy “sufficient market position and advantages” for both local brand lines and imported brand lines.

At present, Yili has laid out several sub categories through its brand “jinlingguan”, including organic, A2 protein, sheep milk powder and so on.

The senior management of Yili quoted Nielsen data at the meeting, saying that in 2021, the growth rate of Yili infant milk powder ranked first in the industry, and its share has risen to the second in the market. The Euromonitor data found by xiaoshidai shows that the market share of Aoyou and Yili in terms of sales in 2021 is 6.3% and 6.2% respectively, with a total market share of 12.5%. After the combination of the two, they will surpass Nestle (11.7% market share) and become the second in the industry.

According to the senior management of Yili, Yili will continue to increase its investment in infant milk powder in 2022 and continue to expand its advantages in share and growth rate. “In terms of resource allocation of other (potential) businesses, we will give priority to businesses with large market, good profits, many opportunities and high certainty, which is why we give priority to the investment in milk powder.”.

In his view, on the one hand, the opportunity of infant milk powder lies in that, with the decline of the share of some foreign capital and small brands, China’s infant milk powder industry with a scale of 100 billion still has great opportunities for integration, and Yili can seize the blank market that has been released. On the other hand, in the medium and long term, the impact of fertility is expected to improve with the normalization of the epidemic and the implementation of fertility incentive policies.

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