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Yili to invest in NZ infant formula processing

By Mark Astley , 19-Dec-2012

Chinese dairy giant Yili has announced plans to invest CNY 1.1bn ($176m) in the development of a New Zealand-based infant formula manufacturing plant.

Inner Mongolia Yili Industrial Group Co (Yili), which manufactures a wide range of dairy products for the Chinese market, confirmed the investment in a notice published on the Shanghai Stock Exchange (SSE) website earlier this week.

According to the announcement, the New Zealand project will have an annual output of 47,000 tonnes once fully operational. 

“The Company has recently held the Seventh special directorate meeting, which discussed and approved issues including the ‘Request of Investment in New Establishment of Infantile Milk Powder Formula Project with Annual Output of 47,000 Tons in New Zealand,” said the notice.

New Zealand acquisition

According to reports from China, the plant will help Yili meet increasing domestic demand for foreign-made dairy products. 

DairyReporter.com approached Hohhot City-based Yili in relation to the announcement, but no one from the company was available prior to publication.

A number of Chinese media outlets have further confirmed this week’s announcement.

According to state media reports, Yili announced its plans after completing the purchase of New Zealand-based dairy processor, Oceania Dairy Group Ltd.

The New Zealand-based firm will be responsible for managing the project, the reports added.

Construction is expected to take 19 months, and processing operations at the new plant are scheduled to begin in June 2014 

Dairy safety

A series of dairy product-related food safety scares and scandals have tainted the reputation of the Chinese dairy industry in recent years.

In 2008, six children died and 300,000 people were sickened after consuming melamine-tainted infant formula. Since then, there has been a constant stream of dairy-related contamination scares in the country.

Earlier this year, Yili itself was forced to remove six months-worth of its China-made QuanYou infant formula products from shelves in China after officials discovered elevated levels of mercury in samples.

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