Wilmar seals 50:50 deal with Kellogg for China market

The venture will be for manufacturing, selling and distributing snacks.

In a release, Kellogg Company and Wilmar International Limited announced a 50:50 joint venture between Kellogg and Wilmar for the manufacture, sale and distribution of cereal, wholesome snacks and savory snacks in China.

Wilmar’s wholly-owned subsidiary in China, Yihai Kerry Investments Co., Ltd, will participate in the joint venture. Wilmar will contribute infrastructure, supply chain scale, an extensive sales and distribution network in China, as well as local China market expertise to the joint venture.

Kellogg will contribute a portfolio of globally recognized brands and products, along with deep cereal and snacks category expertise. The Joint Venture will use the Kellogg’s® and Pringles® brands. Together, Kellogg and Wilmar will leverage
this complementary expertise to maximize marketing and manufacturing synergies.

China is expected to become the largest food and beverage market globally within the next five years, driven both by the growth of a middle class consumer base in large cities and an increased desire for a wide range of packaged and branded foods. Cereal consumption is currently being driven by rapid growth in milk consumption, along with consumers’ desire for healthy and convenient breakfast foods.

Snack foods also represent a very large growth opportunity. “China’s snack-food market alone is expected to reach an estimated $12 billion by year-end, up 44 percent from 2008,” said John Bryant, Kellogg Company’s president and chief executive officer.

“Tocapture this growth, we will leverage the key strengths Kellogg and Wilmar bring to the partnership – the globally recognized Kellogg’s® and Pringles® brands and deep category knowledge; scale and local market experience; and our mutual commitment to consumer-focused innovation," he added.