Spanish confectionery manufacturer Chupa-Chups is to close down its marketing and sales network in China after reaching an agreement to sell 50% of its operations there to Chinese food manufacturer Tingyi and create a 50-50 joint venture company.
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Chupa-Chups, which is famous for its lollipops, also has factories in Mexico, Russia and Spain, but its Shanghai plant is the least profitable. The company does not publish earnings data, but admitted that sales last year fell 10%. The company said its decision to partly withdraw from China comes from a need to lower its costs globally.
By creating a 50-50 joint venture in China with Tingyi, one of the largest food producers in China, Chupa-Chups will gain a valuable sales network, which the confectioner hopes will help it gain country-wide coverage for its products, reported El Pais.
