Shengyuan International Group announced the acquisition of Harbin Abete Dairy Co., Ltd. China Economic Weekly reporter learned from Shengyuan International that the company has signed a contract with Harbin Abete Dairy. The two sides reached a consensus on the acquisition in June this year and have now completed the acquisition. Abbott Harbin has become a wholly owned subsidiary of Shengyuan International. However, Shengyuan International did not disclose the specific amount of the acquisition.
According to the data, Abete Dairy was established in 1988 as a veteran wet-process enterprise with independent production license for infant formula milk powder. In March 2017, Albert Dairy's infant milk powder brand "Enlightenment", "Start" and "Qiyue" have passed the formula registration. Shengyuan said that after the completion of the contract, Shengyuan "Aiyiduo Enlightenment", "Start" and "Qiyue" three baby powder brands will immediately enter the production, market layout and sales stage.
The industry believes that Shengyuan's move is in line with the trend of increasing the concentration of domestic milk powder market, and can help Shengyuan consume the capacity of French factories. It is expected that more milk powder enterprises will merge and integrate in the future. In explaining the acquisition plan, Shengyuan International also actively encourages mergers and reorganizations among enterprises in terms of national policy orientation. As early as 2013, the Ministry of Industry and Information Technology has formulated a sufficient plan for the domestic infant milk powder industry. It is clear that from 2016 to 2018, 3-5 large-scale enterprise groups with sales of more than 5 billion yuan will be cultivated. The concentration of the top 10 domestic brand enterprises will exceed 80%, the total number of enterprises will be reduced by about 30, and eventually the formula milk powder enterprises will be integrated into 50.
In May 2019, the State Council issued Opinions on Deepening Reform and Strengthening Food Safety Work. The opinion pointed out that the promotion of domestic infant formula milk powder should be implemented, and the merger and reorganization of infant formula milk powder enterprises should be supported.
From the current domestic infant formula industry development momentum, the industry concentration is also the general trend. Especially after the implementation of the new formula registration policy, a number of unregistered miscellaneous brands and OEMs were gradually eliminated. But also because of the implementation of the New Deal, milk powder companies have come back to the same starting line. Prior to this, a number of people from milk powder enterprises introduced to reporters that, whether foreign or domestic milk powder, the competition has intensified and the industry is facing full competition.Shengyuan has not responded to the purpose of the acquisition as of the publication. Song Liang, a dairy industry researcher, believes that Shengyuan's acquisition of Abbott Dairy is mainly to obtain three milk powder brands registered through the national formula system. "Shengyuan's factories in France have abundant milk resources and large base powder production capacity. The three brands of Abete Dairy can be transferred to other factories in the future, consuming part of the capacity of Shengyuan's factories in France." Song Liang also pointed out that with the increasingly fierce competition in the milk powder Market in China, the market concentration is increasing, and the survival of some regional milk powder manufacturers is becoming increasingly difficult. Although many enterprises have passed the formula registration, they are essentially in a state of suspension. Selling themselves is the best way out. In the future, more milk powder manufacturers will be integrated.
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