Consumer China

Sanyuan Foods

  • Published 26 Nov 2009

The Beijing-based dairy products maker faces both challenges and opportunity in its ambitious attempts to expand across China.

Background:Beijing Sanyuan Foods Co (600429:SHA) listed in 2003 and manufactures and sells its Sanyuan branded fresh milk and yoghurt. This year it also moved into the powdered milk market following the purchase of core assets of Sanlu Group – formerly one of China's major infant milk powder brands, which went bankrupt following its involvement in last year's melamine milk scandal. Sanyuan is thus producing infant milk powder through Sanlu's production plants and distribution networks under the Sanyuan brand. Sanyuan also breeds milking cows through a subsidiary and holds a 50% stake in the Beijing McDonald's franchise. Unlike Sanlu, Sanyuan was one of the few major domestic dairy brands not implicated in the melamine milk scandal, which has boosted its reputation in particular in its home region Beijing.

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