Groupe DANONE and Mengniu Establish Joint Venture in China
The joint venture will combine Mengniu’s position as China’s market leader in dairy products and Groupe DANONE’s technology and marketing know-how to bring high quality dairy products to Chinese consumers.
18/12/06 Groupe DANONE and ChinaMengniu Dairy Company Limited have announced the signing of a joint venture agreement to cooperate in the production and distribution of fresh dairy products in China. The joint venture will combine Mengniu’s position as China’s market leader in dairy products and Groupe DANONE’s technology and marketing know-how to bring high quality dairy products to Chinese consumers and will contribute to improve the Chinese dairy industry. According to the agreement Mengniu will hold 51% of the stake of the joint venture and Groupe DANONE 49%. With a low per-capita consumption, the Chinese market for dairy products still has considerable room for growth.
Inner Mongolia Mengniu Milk Industry (Group) Co., Ltd is the market leader in milk production in China. Established in 1999, today it has 20 plants in 15 provinces in China. It has developed liquid milk, ice cream, milk powder and milk tablets. With around 1 billion euros of total sales and an increase of 50% in 2005, Mengniu is listed in Hong Kong.
With around EUR 13 billion of total sales in 2005, Groupe DANONE is the world leader in fresh dairy products and bottled water (in volume terms), and no. 2 in the biscuit market worldwide. In Asia, the group posted sales of more than EUR 2.2 billion with strong positions in the water market (no.1 in bottled water in China and Indonesia) and the biscuit market (leader in Malaysia, India and China, no.2 in Indonesia). Danone entered China’s market in 1987 and the group posted sales of around EUR 1.2 billion in China.