DMK, Germany’s largest milk processor, plans to open a sales office in Shanghai as it looks to expand its presence in China’s fast-growing dairy market.
The company, formed through last year’s merger between German dairy companies Nordmilch and Humana Milchindustrie, is looking to open the office in the city at the end of the year.
DMK already sells products through importers and distributors in China, including milk powder, UHT products and cheese, but the company is targeting China as part of renewed focus on markets outside Germany in the wake of the merger.
“Our ambition is to generate more business outside Europe,” a spokesperson told just-food at the Anuga trade exhibition in Cologne.
The spokesperson said DMK had formed divisions to focus on developing its operations in new markets and creating products to suit the evolving needs of consumers overseas.
“When we merged we created business development and innovation management departments. Asia is one of the regions we will put more focus in the years ahead,” she said.
The bulk of DMK’s sales are generated in Germany. Only 30% of the company’s turnover is made outside its home market, with 20% from Europe. “Only 10% is outside Europe and that is not enough,” the spokesperson said.
In building businesses overseas, Germany’s dairies lagged behind their major European rivals, she said. “German companies are still a bit behind if you compare us to Arla Foods and FrieslandCampina.”
A key part of DMK’s push in international markets is the relaunch next year of its Oldenburger range of dairy products. Oldenburger is DMK’s key brand outside Germany and is already “strong” in Russia, Japan and southern Europe, Stefan Keller, executive vice president for sales for DMK’s cheese division, said.
Keller emphasised DMK’s ambition to expand in the East – “Asia is the market we want,” he said – and indicated the Shanghai office could be used as a base for possible expansion in, for example, Indonesia and Vietnam.
However, he acknowledged that the likes of New Zealand dairy giant Fonterra already had a foothold in Asian markets. The region’s proximity to Australia and New Zealand meant dairy companies from those countries could compete fiercely on price in Asia. “New Zealand is strong with whole milk powder and it defends the market at every price level.”