Dutch dairy products giant Friesland Coberco has said it plans to transfer its production and sales activities in China to Tianjin Sino-Finnish Dairy Research and Trading Center, its current joint venture partner there, on 24 November 2004.
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Friesland Coberco has had a majority interest in the Chinese dairy company Friesland Tianjin Dairy Foods since 1996. The company produces and sells milk-based and yoghurt drinks under the brand Dutch Lady. Tianjin Sino-Finnish Dairy Research and Trading Center will continue the activities in Tianjin in a new joint venture called Dutch Lady Tianjin Dairy Company. Friesland Coberco will obtain a 5% minority interest in the operation. The brand Dutch Lady will remain the property of Friesland Coberco, which will license it to the new company.
“Friesland Coberco is withdrawing from China because of the rapidly deteriorating conditions on the Chinese dairy market. Owing to the overproduction of dairy products in that country, margins are continually being eroded there, with no prospect of real change for the medium term,” the Dutch company said.
However, Friesland Coberco said it will remain active on the Chinese market through its sales office in Hong Kong, from where it will continue sales of Friso infant foods, Dutch Lady milk powders and Dutch Lady Calcimex, which were not part of the joint venture.
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