Yashili International and European dairy producers Danone and Arla have entered into a global strategic cooperation agreement. Signed at the opening of Yashili’s new infant formula plant in Pokeno, New Zealand, the agreement will see the three companies work closer together in supplying products into Arla and Danone’s markets.
The Pokeno plant, which was officially opened by Prime Minister John Key this month, is expected to be part of the dairy giants’ global sourcing strategy. The new plant has an annual production capacity of around 52,000 tonnes of infant formula products.
Yashili New Zealand’s new factory in Pokeno was a great vote of confidence in the New Zealand dairy sector, said Key. Speaking at the opening of the Chinese dairy company’s new $220 million factory, Key said China had made a significant investment in New Zealand and it marked “an incredibly important day in relations between China and New Zealand”.
Yashili New Zealand is a subsidiary of Yashili International Holdings Ltd and Mengniu Dairy Co. The three companies have a history of collaborating. Danone acquired 25% of Yashili last year while Arla Foods has a joint venture company with Mengniu Dairy Co, which is called Arla Mengniu.
Yashili is one of the big three producers of infant milk formula for the domestic market in China, according to the company’s website. China’s infant formula market is expected to grow to NZ$32 billion by 2017 (Source: Euromonitor data).
Yashili International Group Chief Executive Lu Minfang, Yashili NZ General Manager William Zhao and China Mengniu Dairy Co Chief Executive and Chairwoman of Yashili International, Sun Yiping were also present as the new agreement was signed.