China’s state council has launched a detailed policy plan to push consolidation within the country’s infant formula manufacturing sector.

This builds on a broader goal to build larger companies in the sector set by the Chinese ministry of industry and information technology (MIIT) last October.

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According to the new plan, by the end of 2015 the Chinese government would promote mergers and acquisitions creating 10 formula companies with annual sales exceeding CNY2bn (US$320.9m).

Beijing also foresees further consolidation creating three to five large companies with annual sales exceeding CNY5bn (US$802.4m) by 2018. China has about 128 formula makers, including multinationals.

“The M&A will include all infant formula manufacturers in China, including state-owned companies, private companies, joint ventures and operations of multinationals,” said a ministry spokesperson.

Meanwhile, the China Dairy Industry Association has continued its work assessing the quality of infant formula made in China, releasing this week a new list of trusted products that included Nestlé formula products.

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