China's biggest dairy group Yili is investing further in the ice-cream market, revealing a plan to spend CNY215.5 million (€20.8m) on two new ice-cream production facilities.
The company said in a statement to the Shanghai Stock Exchange last Friday that the plants would be built in Foshan city, Guangdong province, and Pingyin, Shandong province, with a total capacity of 150 metric tons of ice-cream each day. The firm also revealed that it will co-operate with Yuanyuan Dairy in Henan province to build a plant with capacity for 100 metric tones of yoghurt and 150 metric tons of UHT milk daily. The total investment is expected to be CNY68 million, with almost half invested by Yili. Yili has been expanding rapidly in the last year on the back of strong sales and profit growth. The company reported a 30 per cent rise in first half revenue to CNY5.7 billion (€558.5m) and net profits up by 11.5 per cent over the prior year's first half to CNY171 million. "Yili's increasing investment in the yoghurt market, which is less developed than that of milk, looks promising for the company. It currently has a 14 per cent share of this segment," Bo Guanhui, an analyst at CITIC Security, told AP-Foodtechnology.com earlier this year.
Ice-cream is also growing fast. According to ACNielsen's tracking of sales in supermarkets, groceries and kiosks, the volume of ice-cream bought in Shanghai alone in 2005 increased by 36 per cent on the previous year to reach 18.2 million kg. The sales value was CNY332.6 million, up 31 per cent.
Finally the group said it would invest US$500,000 in expanding its sales network in Mongolia. A Yili spokesman said that the company is also in talks with the government to set up a dairy farm in Mongolia.