Yoplait owner General Mills is looking to enter Chinas yoghurt market

Yoplait owner General Mills is looking to enter China's yoghurt market

General Mills, the controlling shareholder of yoghurt business Yoplait, has started building a yoghurt plant in China.

Chris O'Leary, head of General Mills' international operations, said the US food giant was eyeing China's "attractive" yoghurt sector and had begun construction on a facility in the east of the country.

"We have now broken ground on a new yogurt factory in eastern China," O'Leary said at the Consumer Analyst Group of New York investment conference.

"The yoghurt market in China is attractive to us. Category sales have doubled in the last five years to US$8bn and are projected to more than double again, in the next five years."

O'Leary told analysts General Mills would look to build a yoghurt business in China along similar lines to frozen food arm Wanchai Ferry.

"Once our factory is up in running we plan to follow the Wanchai Ferry model, start small in a few cities, prove out the business model and then expand," he said.

Fellow multinational and yoghurt giant Danone is selling yoghurt in China through a venture with local dairy processor Mengniu.

The growth of the sector has also attracted other companies. In November, Japanese food group Meiji Holdings started producing fresh dairy products for the Chinese market.

General Mills' Chinese business is focused on Wanchai Ferry, ice cream brand Haagen-Dazs and Bugles and Trix snacks but the company is looking to "expand beyond our current categories", O'Leary said.