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July 16, 2020

Danone invests in infant formula, medical nutrition in China

French food group Danone has today (16 July) announced a series of investments in China covering two of its businesses – including an acquisition.

By Dean Best

Danone has today (16 July) set out a series of investments in China, with the French giant’s infant-formula and medical-nutrition businesses getting funds for expansion.

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The Aptamil owner said it is spending EUR100m (US$114.1m) to “strengthen” its “specialised nutrition” operations in the country. Danone’s specialised nutrition division is the company’s second biggest by sales – generating EUR7.56bn, or 30% of group sales, globally in 2019 – and houses the company’s infant-formula and medical-nutrition businesses.

As part of the EUR100m investment, Danone has acquired the Murray Goulburn Dairy (Qingdao) Co. Ltd business in China from Canada-based dairy giant Saputo. Struck for an undisclosed sum, the acquisition gives Danone its first production facility for infant milk formula in China.

Some 410 miles further south, Danone is also putting part of the investment into its “advanced medical nutrition” facility in the city of Wuxi in Jiangsu province. The money will enable Danone to develop “protein-based liquid nutritional supplement solutions” as part of the group’s “food for special medical purpose” range. The company says those products “nutritionally support healthy ageing and facilitate recovery of patients who are ill”.

Danone, meanwhile, has also opened a research centre in Shanghai. The site will focusing on breast milk and gut health.

The company’s early-life nutrition unit in China has also been certified B Corp. More than one third of Danone’s global business is covered the certification. B Corp is a certification companies can qualify for if they meet certain requirements set out by B Lab, the US-based non-profit which created and administers the system, including obtaining a qualifying score in the B Lab impact assessment covering a raft of environmental, social and governance (ESG) criteria. 

Véronique Penchienati-Bosetta, the executive vice president of Danone’s specialised nutrition division, said: “The opening of the open science research centre, the acquisition of local manufacturing capabilities and the B Corp certification are key milestones for Danone’s presence in China as they will allow us to further invest responsibly in the promotion of healthy and balanced diets, grounded in scientific research and tailored to Chinese nutritional and health needs, habits, and traditions.”

Related Companies

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What is the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry?

While wanting to protect the country from being overwhelmed by Omicron, China’s adherence to a Zero-COVID policy is resulting in a significant economic downturn. COVID outbreaks in Shanghai, Beijing and many other Chinese cities will impact 2022’s economic growth as consumers and businesses experience rolling lockdowns, leading to a slowdown in domestic and international supply chains. China’s Zero-COVID policy is having a demonstrable impact on consumer-facing industries. Access GlobalData’s new whitepaper, China in 2022: the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry, to examine the current situation in Shanghai and other cities in China, to better understand the worst-affected industry sectors, foodservice in particular, and to explore potential growth opportunities as China recovers. The white paper covers:
  • Which multinational companies have been affected?
  • What is the effect of lockdowns on foodservice?
  • What is the effect of lockdowns on Chinese ports?
  • Spotlight on Shanghai: what is the situation there?
  • How have Chinese consumers reacted?
  • How might the Chinese government react?
  • What are the potential growth opportunities?
by GlobalData
Enter your details here to receive your free Whitepaper.

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