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August 2, 2018

China dairy giant Yili eyeing investment in Pakistan’s Fauji Foods

Inner Mongolia Yili Industrial Group Co., one of China's largest dairy companies, is looking to buy up to 51% of Pakistan peer Fauji Foods.

Inner Mongolia Yili Industrial Group Co., one of China’s largest dairy companies, is looking to buy up to 51% of Pakistan peer Fauji Foods.

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  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
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In a filing to the Shanghai Stock Exchange on Tuesday (31 July), Yili has submitted its interest in holding talks with Fauji Foods’ investor Fauji Fertilizer Bin Qasim Ltd (FFBL) and other shareholders in the Pakistan dairy firm, which is based in Lahore.

FFBL, which is listed on the Pakistan Stock Exchange, issued its own filing to confirm Yili wanted to get round the table.

“We write to disclose that Fauji Fertilizer Bin Qasim Ltd has been approached by a potential acquirer, Inner Mongolia Yili Industrial Group Company Limited, that has expressed its intention to enter into negotiations or discussions with FFBL for the proposed acquisition of up to 51% of the voting shares and/or control in [a] subsidiary of FFBL, which is Fauji Foods Limited, from FFBL and other shareholders.”

Yili underlined how “no binding transaction” had been signed.

According to the Fauji Foods website, the company, formerly Noon Pakistan Limited, was set up in 1966 and has “achieved market leadership in several food categories”, including butter, cheese and UHT milk.

Fauji Foods markets a range of dairy and juice products under the brand name Nurpur.

In 2017, Fauji Foods generated net sales of PKR7bn (US$56.4m), up from PKR3.37bn in 2016. However, the company made an operating loss of PKR2.58bn and a loss after tax of PKR2.29bn.

Yili posted revenue of CNY68.1bn (US$9.98bn) in 2017, compared to CNY60.6bn in 2016. Its net profit attributable to shareholders was CNY29bn.

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What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

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