CHINA – FrieslandCampina, a Dutch multinational dairy cooperative, has divested its infant-formula factory in Xiushui, China to local peer Inner Mongolia Yili Group.
The proposed transaction of an undisclosed amount includes the entire production site of the infant formula.
Yili said all the 270 employees will continue to work at the factory after the purchase, which is expected to be completed before the end of the year.
The Dutch dairy revealed that the deal was part of its strategy to center its infant-formula business in China on its Friso brand.
A spokesperson for FrieslandCampina explained: “Xiushui is designed for infant nutrition production and is mainly producing non-dairy creamers while preparing for the future growth of the Zi Mu brand. Zi Mu is a local infant nutrition brand.”
“The envisaged divestment follows FrieslandCampina’s announcement last month that its specialized nutrition business will focus on the Friso brand, innovation in the premium segment, and further digitalization.”
The spokesperson added that the company’s infant formula strategy in Greater China remains focused on building its successful Friso brand through a strong innovation pipeline, further premiumization, and expanding in lower-tier cities.
The sale of the factory was hinted last year by FrieslandCampina, which said it was weighing up the future of its infant-nutrition business Friso.
FrieslandCampina shuts down Thailand factory
Meanwhile, the Dutch cooperative has shut a factory in Thailand as a way of refocusing its milk business in the country.
The company said it is focusing on selling long-life dairy products in Thailand and quit the locally-produced, pasteurized, milk business.
A spokesperson for FrieslandCampina said: “Given the intense competition in Thailand’s pasteurized milk market segment and after carefully considering the strategic business direction, FrieslandCampina will focus on long-life dairy products in the Thai consumer market.”
The spokesperson added that the co-op would continue to market long-life milk brands, including Foremost and Falcon, which will continue to be produced at its factory in Samrong, another district in the Thai capital.
In addition, the company is also relocating its single factory in Malaysia from Petaling Jaya to Bandar Enstek, Negeri Sembilan.
FrieslandCampina revealed that the development of the new site will be finalized in 2025.
In Europe, FrieslandCampina also completed a series of investments and disposals, the chief executive Hein Schumacher detailed.
The company has invested in new recyclable PET packaging lines in Belgium’s Aalter and expanded its lactoferrin production in Veghel.
Furthermore, the company previously had announced plans to sell off part of its German consumer business to focus on growing international consumer brands in Germany, including Chocomel, Valess and Frico.
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