Kellogg targets China growth with Wilmar joint venture24 September 2012US food giant Kellogg has agreed a joint venture with Singapore-based palm oil firm Wilmar International to expand its cereal and snacks business in China. The 50:50 joint venture covers the manufacture, sale and distribution of cereal, wholesome snacks and savoury snacks in China. The partnership will be delivered by Wilmar's wholly-owned subsidiary in China Yihai Kerry Investments Co. Yihai Kerry Investments Co will contribute to infrastructure, supply chain scale and provide a sales and distribution network in China. Kellogg said in a statement that it expects China to become the largest global food and beverage market globally within the next five years "driven by the growth of a middle class consumer base in large cities and an increased desire for a wide range of packaged and branded foods". "China's snack-food market alone is expected to reach an estimated $12 billion by year-end, up 44% from 2008," said John Bryant, Kellogg’s president and chief executive officer. "This joint venture positions our China business for growth and fundamentally changes our game in China. Our organisations have developed a strong working relationship and trust. I have every confidence that our partnership will be a long-term success.” “This joint venture with Kellogg will complement our existing Consumer Product business and leverage on our extensive distribution network and support infrastructure in China,” added Kuok Khoon Hong, Wilmar’s chairman and chief executive. “With our joint strength and shared vision, I am confident that we will be able to develop a leading cereal and snacks business together." The joint venture, which is subject to regulatory approval, will be headquartered in Shanghai. | |
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