Swiss food giant Nestlé SA made a strategic investment in China's Ningxia Cezanne Dairy Industry Co. for an undisclosed amount, Chinese-language newspaper Securities Daily reported May 24, citing the companies at an event.
As part of the agreement, Nestlé sold a 95% stake in its Hulunbuir dairy plant in Inner Mongolia to a shareholder of Cezanne Dairy, while retaining 5% of the unit, according to the report. Meanwhile, Nestlé also acquired a 6% stake in Cezanne Dairy.
At the event, Cezanne Dairy chairman Yan Jianguo also unveiled a plan to launch an IPO within three years. Yan reportedly expects the company to reach a market cap of more than 100 billion yuan in 10 to 15 years.
Founded in 2010, Cezanne Dairy specializes in deep processing of dairy products, such as protein concentrate, whipping cream and cheese. It serves as a supplier to Nestlé as well as other companies including Starbucks Corp., Coca-Cola Co., Tingyi (Cayman Islands) Holding Corp., China Mengniu Dairy Company Ltd. and Inner Mongolia Yili Industrial Group Co. Ltd.
In China, Nestlé has so far invested in and set up a series of facilities for raw material sourcing, product innovation and production that employ nearly 50,000 people. They include 33 factories, four innovation centers, one food safety research center, one dairy farming training center and one coffee center.
As of May 23, US$1 was equivalent to 6.39 Chinese yuan.
