Dutch food and nutrition group Royal Numico today (Wednesday) announced that agreement has been reached on the sale of its dairy manufacturing plant in China to Heilongjiang Feihe Dairy Industry Co Ltd, a subsidiary of American Dairy Inc, for a total consideration of US$7.3m.

The divestment of this Chinese dairy manufacturing plant is in line with Numico's strategic decision to fully focus its Chinese Baby Food activities on its premium brand Cow & Gate in Shanghai and the Guangdong province, Numico said.  Numico has entered into an exclusive marketing and distribution agreement with Hutchison to specifically further develop the Guangdong province.
 
The transaction is expected to be completed by summer.  Post completion, the transaction will substantially improve the financial performance of the continued baby food operations in China, it said.