Dairy Companies Announce Strategic Cooperation Deals 03-05-2024

Summary: Mengniu recently announced further focus on foodservice, Milkana has agreed an investment from Cathay Capital and Baifei Dairy is to build a JV company with Babushkina Krynka of Belarus.

More strategic cooperation cases were recently announced in the dairy sector as competition intensifies.

China Mengniu Dairy (Mengniu, Stock Code: 02319.HK)

Recently a strategic cooperation agreement between Mengniu and Beijing Nanchengxiang Catering Co., Ltd. (Nanchengxiang) was signed. Nanchengxiang is an emerging Beijing-based fast-food chain with 200+ restaurants, making around USD211.1 million (RMB1.5 billion) in revenue in 2023. Focusing on breakfast offerings, the deal is that Mengniu will provides its "Mengniu Professional Dairy Products" range to all Nanchengxiang's restaurants - this involves Mengniu pure milk and whipping cream

During 2021 the group launched a "Mengniu Professional Dairy Products" range which now includes pure milk, filtered milk and whipping cream (1L and 10kg), and is supplied to at least 10 foodservice operators located mostly in the country's southern and eastern regions.


On 26 Jan., Cathay Capital announced a strategic partnership with Savencia Fromage & Dairy (Savencia) involving an exclusive strategic investment in the cheese brand Milkana.

Savencia (then Bongrain) introduced Milkana to China in 1996 as China's first wholly foreign-owned cheese producer. Milkana led the retail cheese market with a market share of around 20% until it was overtaken by Shanghai Milkground Food Tech Co., Ltd. (Milkground Food, Stock Code: 600882) in 2021.

However, Cathay Capital believes its investment can facilitate the brand's growth through further penetration into local markets, organisational restructuring, improved execution and exploration of new-generation cheese products.

Cathay Capital is the first Chinese private equity fund certified by the Financial Markets Authority (AMF) in France, with a focus on China-European trade. In foodservice, It has invested in other businesses such as the beverage brand Genki Forest and the snack chain YUMMY SNACK, etc.

Guangxi Baifei Dairy (Baifei Dairy)

On 31 Jan., Baifei Dairy's subsidiary Hunan Baifei Dairy Co., Ltd. settled strategic partnership agreement with OJSC Babushkina Krynka, described as the largest dairy processor in Belarus. This involves establishing a JV in the Wangcheng Economic Development Zone, Changsha City, Hunan Province, focused on yoghurt, sour cream, ice cream and cheese. In the early stage, Babushkina Krynka will supply raw materials and technical support and the JV will be the business operator. The expectation is to invest further in capacity rampup and brand development if the market's response is positive.

Baifei Dairy is a leader in buffalo milk in China, selling a range of buffalo dairy products including pure (UHT) milk, fresh milk/yoghurt and school milk.

Babushkina Krynka produces WMP, SMP, cheese, butter, whey powder, ice cream and glazed soft curds ("tvorog"), with a total processing capacity of more than 60,000 tonnes of milk per month. Its Pure Milk 200ml packs started selling in Hunan and Jiangsu in 2017.


For more information,please check our Dairy Products China News.

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