Aviko to start producing chips in China again

Potato processor Aviko takes over the Chinese chips factory Hongyuan Louis. Every year, 50.000 tons of frozen chips are produced here. The takeover follows a previously failed collaboration with a French fries producer in China.

Aviko, part of Royal Cosun, acquired 90% of the shares of Hongyuan Agriculture before the takeover. Hongyuan Louis is a relatively young company in Xilinhot, in the northeast of China. Aviko becomes the owner of the factory, the potato storage facilities, a semi-automatic cold store, the boiler house and the waste water treatment. About 170 people work there. Hongyuan Agriculture remains involved with 10% of the shares, including for the purchase of potatoes. 

Market grows 10% annually
With the acquisition, Aviko is fulfilling its growth ambitions in the Chinese market, the company said in a statement. “With an average market growth for frozen chips of 10% per year, China is of great strategic importance to us,” says de new CEO Chris Deen. It was therefore striking that the collaboration with Snow Valley Agriculture was terminated more than a year ago ended† As a result, Aviko's local French fries production in China came to an end.

Prominent market position
Aviko still had a flake factory in the Gansu province in the north of the country. In addition, the processor has invested in a commercial distribution network for frozen potato products in China in recent years. “With the acquisition of Hongyuan Louis, we can strengthen our position with modern, local production facilities,” says Deen. “This deal will help us gain and maintain a prominent market position in China.”

According to Aviko, more and more Chinese are embracing Western culture, fashion and (eating) habits. Potatoes and potato products such as French fries are therefore increasingly part of the daily diet.

Jeanette Pennings

Jeannet has her roots in the flower bulb sector and she grew up on an agricultural company in the northern part of North Holland. As a generalist she reports for Boerenbusiness across all sectors. She is also exploring the possibilities of sponsored advertising.

j.pennings@boerenbusiness. Nl

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