China Huishan Dairy Holdings Company Limited and Dutch dairy company Royal FrieslandCampina N.V. have entered into exclusive talks on creating a JV to produce, market and sell high-quality infant milk formula in China.
While the JV is planned to operate as a fully integrated infant milk formula supply chain, the two companies will continue to run their existing infant milk formula businesses separately.
While Huishan will continue to market its brands, FrieslandCampina will produce Friso brand products in the Netherlands and market them independently.
In this joint venture, Huishan will provide raw milk from its dairy farms in China to the JV and the JV will produce and market infant milk formula.
Both companies believe that the proposed JV will benefit from their respective production, sales and marketing capabilities.
The companies already successfully cooperate in the production of non-dairy creamers.
Huishan grows and processes alfalfa and supplementary feeds to dairy farming.
The Chinese company processes and sells dairy products under the Huishan brand, which has the highest market share in the north-eastern provinces of the country.
In China, FrieslandCampina is known for Friso, a premium brand in infant formula and for selling ingredients to Chinese food and infant formula manufacturers.
In November 2013, FrieslandCampina, Wageningen University & Research Centre and the China Agricultural University set up the Sino-Dutch Dairy Development Centre to improve dairy production, safety and quality levels in China’s dairy chain.