Mengniu Dairy, the Chinese dairy processor, has reported an almost 11% rise in annual profits as price increases boosted sales and offset a “surge” in raw-material costs.
The company, which, according to data from industry analysts Rabobank, was the world’s 16th largest dairy company in 2010, posted a 10.9% increase in net profit for last year, rising to CNY1.24bn (US$189.6m).
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Mengniu implemented what it called “stringent” measures to control costs. The company said “surging” prices of raw materials led to “considerable cost pressure” on dairy companies in China.
However, revenue was up 17.7% in 2010 to CNY30.27bn. Mengniu upped its selling prices and “optimised” its product portfolio to “consolidate the market share of [our] high-end products”.
Mengniu pointed to its move in November to buy a majority stake in yoghurt maker Shijiazhuang Junlebao Dairy Co. as an example of its move to develop “high value-added products” and to add “new growth drivers” to its business.
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