Yili to strengthen overseas presence through US$100-million private investment equity fund

CHINA – Yili Group has launched a US$100-million private equity fund to invest overseas, according to the company’s filing with the Shanghai Stock Exchange (SSE).

In the filing, Yili Group’s fully-owned subsidiary, Hong Kong Jingang Trade Holding Company, will serve as the fund manager to invest US$100 million into the fund while YJLC GP Limited, a subsidiary of Hong Kong Jingang Trade Holding Company, will serve as the limited partner.

The fund will enable the Chinese dairy giant to “back consumer industry-focused companies”, as well as to “catch up with the latest business model and products arising from the consumer sector”, according to the filing.

Some of the overseas investments that Yili has made overseas include the more than RMB 3 billion (US$0.43Bn) project called ‘Yili Oceania Production Base’, located in Waimate, South Island, New Zealand, covering raw milk deep-processing project, a UHT liquid milk project, a milk powder production facility, and a packaging facility.

The raw milk deep-processing project and the UHT liquid milk project, with an investment of RMB 200 million (US$28.7m) and nearly RMB 500 million (US$78.82m) respectively, were said would become the largest and highest in the technology of its kind in New Zealand.

In addition, in 2021, the dairy invested NZ$40 million (US$23.52m) in Westland Dairy, New Zealand, which it acquired in 2019, to double the capacity of premium consumer butter production.

The investment from Yili’s Goldrush project to transform Westland’s production, packaging, and warehousing systems, was aimed to increase the annual consumer butter production capacity to 42,000 tons.

In July 2022, Yili bolstered its overseas processing capacity with the opening of a new butter plant in Hokitika, New Zealand.

The facility, described as the ‘largest overseas butter factory’ built by a Chinese dairy company overseas, is under the Yili-owned dairy company, Westland Milk Products.

The opening comes after Yili Group undertook a major refurbishment and upgrade of its Hokitika Dairy Plant, including a new Westgold production line.

The Westgold butter brands are supplied to over 20 countries worldwide, including New Zealand, China, Australia, the United States, and Japan, the company added.

The company said Hokitika’s new butter plant has doubled its capacity to reach up to 42,000 tonnes a year, making it the largest butter plant on the west coast of New Zealand.

During the first half of 2022, Yili noted that in the light of the ongoing COVID19 pandemic and the impact of inflation, it managed to coordinate with its bases in China, Southeast Asian countries, and New Zealand, realizing a 58% year–on–year growth in overseas revenues.

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