Beverages News
- Bright Dairy expects strong sales growth
Date: 9-Mar-2007 Sources: (Shenzhen Daily)
BRIGHT Dairy & Food Co. expects sales to grow by more than 20 percent in 2007 as the company expands operations in yoghurt and other fresh products in biggest domestic cities, according to its top executive.
The company plans to invest up to 500 million yuan (US$64.59 million) this year, partly to raise its yogurt capacity by 50 percent, to help distinguish itself from its two main competitors, Mengniu Dairy and Inner Mongolia Yili Co., chairwoman Wang Jiafen told reporters Wednesday.
Bright Dairy has 10 percent of China's dairy products market, which is expected to grow by about 15 percent a year in the next three to five years.
'The way the market is growing is mostly though specialization,'Wang said.
'Milk has already become a standard product in China, so city dwellers start to worry about matters like health, or food safety, or vitamins. We can develop products to meet these needs,'she said.
Services like daily delivery to 2 million customers are increasingly important, she said.
Reliable refrigeration isn't available in much of China's countryside, limiting Bright Dairy's expansion outside of big cities in central, eastern and northern China. The company is experimenting with local distributors in the outskirts of cities to tackle this, Wang said.
Wang estimated that the four top firms together account for about half of China's milk market, the world's fourth largest.
Shanghai-based Bright Dairy produces about 1 million tons of milk a year from farms near Shanghai as well as from the grassland Inner Mongolia and Xinjiang.
But while Bright Dairy is focusing on specialty products to compete in the fierce price wars of the US$8 billion Chinese dairy industry, its rivals are trying to do the same.
Mengniu recently announced a joint venture to make yogurt with leading French firm Groupe Danone, which already holds a 20 percent stake in Bright Dairy.
'I think it's OK. Danone wants to develop faster because it sees opportunities here,'Wang said, smiling widely, when asked if Danone's new joint venture had cooled the relationship.
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