Chinese dairy giant Yili Group has teamed up with US co-op Dairy Farmers of America (DFA) in a venture that will serve China’s fast-growing dairy market.
“Under this strategic alliance, our first goal is to jointly build a supply chain covering long-term procurement and farm service,” a Yili spokesperson told just-food.
He added: “It is possible for the two companies to form joint ventures and develop new brands in the future, but these are not under discussion right now.” Financial details have not yet been disclosed.
In a statement, Yili claimed its deal with Dairy Farmers of America was “the most important strategic cooperation [in] dairy industry history between China and the USA”. It added: “The companies would dovetail their strengths: namely the US firm’s unparalleled dairy technological strengths and China’s huge demand as the world’s fastest developing dairy market”.
Yili has been under pressure from local rival, Mengniu Dairy, which in May partnered with France-based Danone to strengthen its yoghurt business. Mengniu already has a venture with European dairy giant Arla Foods that sees the companies sell products in China. Last month, Mengniu also struck a deal to buy Chinese infant formula firm Yashili International Holdings.