Dairy giant Yili further replenishes war chest

The Chinese dairy giant Yili continues to score high. Both turnover and profit showed solid growth figures in the past quarter, further supplementing the war chest for making acquisitions and investments. Yesterday it was announced that the Chinese are taking an interest in goat dairy producer Ausnutria.

In the first three quarters of this year, Yili posted a turnover of 85 billion Renminbi, an increase of 15% compared to the same period last year. In that period, profit even rose by more than 30% to 7,9 billion Renminbi. Converted this comes down to a sloppy €1 billion. In their own words, the growth in profit is therefore higher than previously estimated. Based on its current performance, Yili expects to become the first dairy company in Asia to generate more than 100 billion Renminbi in annual sales.

Organic growth and acquisitions 
Pan Gang, chairman of the Yili Group, said in a statement that the company continues to focus on growth markets and changing consumption trends in dairy. The aim is to maintain organic growth, supplemented by making acquisitions, which is easier due to the rapidly increasing profit figures. 

Cheese and organic
It is striking that Yili performed well in cheese and organic dairy in the first three quarters of this year. The turnover of the cheese activities, which are housed in the subsidiary Yili Good Cheese, increased by no less than 180%. The sales of organic products in China also showed impressive growth figures of more than 50%.

Yesterday it was announced that Yili will take a 34% stake in Ausnutria for an amount of €694 million. The management of Yili is pleased with the participation. They see music in the fast-growing Ausnutria, which they believe is the most famous goat's dairy milk in the world. Ausnutria is popular thanks to the product portfolio that has an export license for the Chinese market. According to Bart van der Meer, CEO of Ausnutria Netherlands, little changes due to the arrival of Yili.

Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness. He also focuses on dairy, pig and meat markets. He also follows (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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