Dutch food and nutrition group Royal Numico has announced that it has completed the restructuring of its baby food activities in China, a move it says will substantially improve the financial performance of the continued baby food operations in China.
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Numico announced on 3 March 2005 that the company will fully focus its Chinese baby food activities on its premium brand Cow & Gate in Shanghai and the Guangdong province. In order to specifically further develop the Guangdong province, Numico has set up an exclusive marketing and distribution agreement with Hutchison which will come into effect as of 1 July 2005.
Since the announcement, Numico completed the divestiture of its dairy manufacturing plant in China, sold the underperforming ‘HLRN’ brand to Olamar Holding NV and withdrew ‘QQBB’ – a mainstream baby milk brand – from the Chinese market.
The restructuring of the Chinese baby food activities will result in additional one-off restructuring costs of approximately €2m (US$2.4m) which will be taken in the second quarter of 2005.
