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Dairy Giant Seeks Scale, Eyes Expanding Domestic Market

06 January 2020

CHINA - The year past was special for China Mengniu Dairy Company Limited. For the first time, Mengniu made it among Brand Finance's list of top 500 most valuable brands in the world.

Established in 1999, the company has grown into a mature dairy company in China in just 20 years, sharing dominance of the Chinese dairy market with its main competitor Yili Group.

Last year Mengniu acquired Australian infant formula maker Bellamy's Organic and Lion Dairy & Drinks, Australia's second-largest milk processor, respectively for AUS $1.5 billion (US $1 billion) and 600 million Australian dollars (US $418 million).

Branding was the first thing that pushed the company to make the acquisition, said Jeffrey Lu, CEO of Mengniu. Bellamy, for example, as a world leading organic infant formula, is complementary to the company's portfolio and will enhance its competitiveness in the infant formula market.

After the acquisition, Bellamy is expected to see huge growth by expanding markets outside Australia, which had a population of only 24 million in 2017, signifying a much smaller market compared to China and Southeast Asia.

"Having the growth opportunity will definitely bring more opportunities for the supply chain, and for the upstream, which includes the farmers [in Australia]," the CEO said, adding "so this...I see a perfect match, is a strong brand, very good nature [of Australia], strong upstream supply chain and huge opportunity to grow."

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Source: CGTN

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