US food group JM Smucker is set to further build its business in China, a market it first entered last year with an investment in an oats company.
JM Smucker acquired a minority stake in Chinese firm Guilin Seamild Biologic Technology Development Co., or Seamild, last March. Speaking to analysts in the US yesterday (19 February), JM Smucker CEO Richard Smucker said the company had earmarked other sectors in which to invest and was set to act.
“We have identified other categories in China that we’d like to participate in, either through acquisitions, joint ventures or importing some of our current product offerings,” Mr Smucker told the Consumer Analyst Group of New York investor conference. “We have established offices in both Shanghai and Beijing, and our team is poised to push out on these projects. While additional investments in China over the next several years are expected to be modest, probably under US$200m, we are very optimistic about the opportunities to expand in this region.”
JM Smucker last year paid around $35m for a “non-controlling minority interest” in the privately-owned Seamild. The Chinese firm sells oatmeal under its namesake brand throughout China. It has plants in southern China has just built a manufacturing site in the north of the country.
Mr Smucker called the investment a “great first step” in the country, where consumers eat “a lot of hot breakfast”, he said.
However, the company’s research in China had found “several other categories” that could “fit Smucker’s”, the JM Smucker boss explained.
He added: “This is a long-term approach, we take a generational approach. We have a fifth-generation of business today. So may not be under my watch, or my brother’s and my watch, but hopefully, we have a good footing and can go forward.”