Mengniu adds Junlebao to stable

Mengniu Dairy, China’s largest dairy company by market value, says it will acquire a 51 per cent stake of Junlebao Dairy the fourth-largest yogurt maker, for RMB 469.2 million (EUR52.5 million).

By combining product research and marketing resources with Junlebao, Mengniu expects to enter the world’s top 10 dairy ranking and achieve RMB50 billion turnover in the next five years, according to Yang Wenjun, Mengniu’s chief executive officer.

Junlebao, founded in 1995 and based in Shijiazhuang, Hebei province, owns nine subsidiaries across China and had sales revenue of RMB1.3 billion in 2009.

Song Kungang, chairman of the China Dairy Industry Association, says integration is the most important means of enhancing the competitiveness of China’s dairy industry and is also the key to success overseas. “The merger of Mengniu and Junlebao follows the trend in industry development. It is a good example and reference point for other dairy companies,” Song says.