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Beijing Dairy Industry Acquires US Counterpart
Beijing Sanyuan Foods Co., Ltd. is going global after striking an acquisition deal with US dairy giant Kraft on January 12 in Beijing.

Sanyuan paid US$9.3 million for a 85 percent stake in Beijing Kraft Food Corp., Ltd.

The deal enabled Sanyuan, which already owned a 15 percent stake in Beijing Kraft, to become the sole owner of Beijing Kraft.

Sanyuan is the largest dairy producer in the Chinese capital, producing milk powder, yogurt, cheese and fresh milk.

Sales for the Beijing dairy giant topped 800 million yuan (US$96.4 million) in 2000.

Xing Chunhua, president of Sanyuan, said the company is not in a position to meet future market demands with its current production capability.

"The acquisition deal is expected to help Sanyuan bridge the gap with Beijing Kraft's 200-ton daily production capacity," Xing said.

Sanyuan will take full advantage of Kraft's international brand to tap the global dairy market, Xing said.

"The sale of the non-core businesses will enable Kraft Foods International to focus resources in China on its rapidly growing soft drink, confectionery, coffee and biscuit businesses, including such well-known brands as Tang, Sugus, Maxwell House and Ritz," said David Chan, area director and vice-president of Greater China Kraft Foods International.

Along with the acquisition in North China, Sanyuan has also obtained a half stake of Guangdong McDonalds in South China.

Sanyuan paid US$9.9 million to take over the 50 percent share in the Gangdong McDonalds Food Company owned by bankrupt Guangdong International Trust and Investment Co.

(21dnn 01/16/2001)

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