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Wilmar unit to form JV with ABF to manufacture yeast and bakery ingredients in China
YIHAI Kerry Arawana Holdings, a unit of Mainboard-listed agribusiness Wilmar International, plans to form a 50:50 joint venture with UK-headquartered food giant Associated British Foods (ABF) to manufacture and distribute yeast and bakery ingredients in China.
In a bourse filing on Monday, Wilmar announced that Yihai Kerry Arawana and ABF have executed a binding term sheet setting out their intentions for the JV.
Headquartered in Shanghai, the JV will acquire the existing Chinese yeast and bakery ingredients business of AB Mauri, a division of ABF. It will also tap on Yihai Kerry Arawana’s supply chain, sales and distribution network and local market expertise in China.
The JV will also build and operate a new yeast plant co-located with Wilmar’s food processing plant in the Taha industrial zone in Qiqihar City in Heilongjiang province, increasing capacity.
In a press release, Wilmar said that the JV will be cost-competitive and “well positioned to capture growth in both traditional Chinese bakery products and western-style baked products, consumer demand for which is expanding rapidly”
“Besides enhancing the range of quality ingredients, this joint venture will enable us to leverage on AB Mauri’s baking know-how and technology to provide better service to the baking industry in China,” said Wilmar's chairman and CEO, Kuok Khoon Hong, in the release.
AB Mauri’s CEO, Cathal Duffy, added: “This joint venture is a great opportunity to build on the foundation of our yeast and bakery ingredients business in China. The joint venture will leverage AB Mauri’s baking know-how and technology with Yihai Kerry Arawana’s extensive route to market, local management expertise and its complementary portfolio of products.”
Shares of Wilmar closed at S$3.32 on Monday, up 3 Singapore cents.