FDBusiness.com

Dutch dairy company Royal FrieslandCampina and China Huishan Dairy Holdings Company have entered into exclusive talks on creating a joint venture to produce, market and sell high-quality infant milk formula in the People’s Republic of China. The purpose of the joint venture is to operate a fully integrated infant milk formula supply chain.

Huishan will provide its high-quality raw milk from its own dairy farms in China to the joint venture and the joint venture will produce and market infant milk formula.

The two companies will continue to run their existing infant formula businesses separately. As such, Huishan will carry on marketing its own brands. And FrieslandCampina’s Friso® brand will still be exclusively produced in the Netherlandsand marketed by FrieslandCampina.

Huishan and FrieslandCampina believe that the proposed joint venture will benefit from their respective production, sales and marketing capabilities. The companies already successfully co-operate in the production of non-dairy creamers.

Huishan is a leading and the most vertically integrated dairy company in the People’s Republic of China. Its business covers the entire dairy value chain, from growing and processing of alfalfa and supplementary feeds to dairy farming and processing and sales of dairy products under the Huishan brand. Huishan’s branded liquid milk products have the highest market share in the north-eastern provinces of China.

In the People’s Republic of China, FrieslandCampina is known for Friso®, a premium brand in infant formula and for selling ingredients to Chinese food and infant formula manufacturers. In November 2013, FrieslandCampina, Wageningen University & Research Centre and the China Agricultural University set up the Sino-Dutch Dairy Development Centre to improve dairy production, safety and quality levels throughout the entire dairy chain in the People’s Republic of China.