McCormick acquires Chinese bouillon company21 August 2012
Flavours company McCormick is to acquire Wuhan Asia-Pacific Condiments Co (WAPC), a privately held company based in China. The completion of the agreement is expected to occur in mid-2013 subject to regulatory approval.
The deal is valued at Rmb 900 million (US$141 million).
WAPC manufactures and markets the well-known DaQiao and ChuShiLe brand bouillon products, which are said to have a leading position in the central region of China. These products complement McCormick's current portfolio of flavour products in China that include spices, seasoning blends and sauces.
Annual sales of WAPC's business are approximately Rmb 730 million (US$115 million).
"McCormick first entered China more than 20 years ago to provide a local source of supply to industrial customers,” said Alan Wilson, chairman, president & CEO of McCormick.
“From this foundation we launched the McCormick brand of flavoru products for consumers. Today, McCormick is one of the leading brands of spices and seasonings, with particularly strong category share in the coastal regions. Across both our consumer and industrial business, we operate profitably in China and have grown sales at a 16% compound rate for the past five years.”
"The addition of WAPC extends our broad range of flavours in China with bouillon. In WAPC's top markets, more than half of consumers use chicken bouillon each day at every meal to enhance the flavour of their food. This business is strong in central China, which fits well with McCormick's presence in the coastal regions. The management and employees of WAPC have built a great business and are driving rapid growth. We look forward to working with them to achieve continued success."
WAPC was founded in 1998. The business has approximately 900 employees, a modern manufacturing facility located in Wuhan, China and a network of distributors that serves traditional markets as well as modern grocery stores.
Sales of the business have grown at a 25% compound annual rate from 2007 to 2011 as a result of increasing demand, rapid distribution expansion and brand marketing. McCormick anticipates continued annual sales growth of at least 10%.
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