Consumer goods supply chain giant Li & Fung could soon turn its attention to the food business after acquiring Asian distributor Integrated Distribution Services (IDS).

Li & Fung announced plans to buy IDS yesterday (13 August) for a cash consideration of HKD$21.00 per share.

The main reason for its purchase is to support its growth strategy in the domestic Asian market, but IDS’ food operations were also a factor.

A statement by the company said: “Food and beverage is a segment that Li & Fung’s management has been considering to enter into. With IDS’ expertise from manufacturing to marketing in this segment, the proposed acquisition provides Li & Fung with the option to enter into this market in a safe and controlled manner at a later date.

“Importantly, IDS will at the appropriate time enable Li & Fung to explore and better understand the food and beverage export market. The proposed acquisition gives Li & Fung the manpower with food experience to enter the market in sourcing and distribution of food products at a later date.”

Hong Kong-based Li & Fung is involved in raw material and factory sourcing, production planning and management, quality assurance and export documentation. The company is a major player in sourcing clothing and toy products in particular, and has just posted a 55% rise in net profit to HK$2.17bn (US$279m) for the first half of the fiscal year.