London / UK. (abf) Food, ingredients and retail group Associated British Foods PLC (ABF) and Yihai Kerry Arawana Holdings Company, Limited, a subsidiary of Wilmar International Limited, have executed a binding term sheet setting out their intention to form a 50:50 joint venture in China for the manufacture, sale and distribution of yeast and bakery ingredients.
The joint venture will acquire existing Chinese yeast and bakery ingredients activities of AB Mauri, a division of ABF, and will leverage Yihai Kerry Arawana’s supply chain, extensive sales and distribution network and local market expertise in China. The joint venture will also build and operate a new yeast plant co-located with Wilmar’s food processing plant in the Taha industrial zone in Qiqihar City, China, significantly increasing capacity.
The joint venture will have cost competitive production and, combined with an established portfolio of products, will be well positioned to capture growth in both traditional Chinese bakery products and western-style baked products, consumer demand for which is expanding rapidly.
«This joint venture is a great opportunity to build on the foundation of our yeast and bakery ingredients business in China. The joint venture will leverage AB Mauri’s baking know-how and technology with Yihai Kerry Arawana’s extensive route to market, local management expertise and its complementary portfolio of products. We are looking forward to working with Yihai Kerry Arawana on the shared vision of building a successful bakery business together,» said AB Mauri’s Chief Executive Officer, Cathal Duffy.
Wilmar’s Chairman and Chief Executive Officer, Kuok Khoon Hong, added, «Besides enhancing the range of quality ingredients, this joint venture will enable us to leverage on AB Mauri’s baking know-how and technology to provide better service to the baking industry in China.»
The joint venture company will be headquartered in Shanghai, China. Completion of the joint venture is subject to regulatory approvals.