Yili buys Shengmu Organic in China

Dairy giant Inner Mongolia Yili Industrial Group is set to buy China Shengmu Organic Milk to expand in the high-end milk products market, according to China Daily. The 37% stake in the largest organic milk producer in China is part of Yili’s plan to integrate its upstream high-quality supply chain capabilities, expand high-end milk categories, and rapidly expand its organic milk business.

Meanwhile, Yili plans to invest CNY538 million (€72.9m) in a dairy production line in New Zealand and spend CNY2.5 billion (€338m) in domestically in order to improve the quality of value-added dairy products, in addition to investing in an R&D center and a cloud business platform in China, according to its statement.

China, the third-largest organic milk market worldwide, has a significant growth potential for organic milk, thanks to emerging middle-class Chinese consumers who have been increasingly favoring natural, pollution-free, organic dairy products without any additives, it said.