BATTLE CREEK, Mich. and SINGAPORE, Sept. 24, 2012 /PRNewswire/ -- Kellogg Company (NYSE: K) and Wilmar International Limited (SGX: WIL) today announced a 50:50 joint venture between Kellogg and Wilmar for the manufacture, sale and distribution of cereal, wholesome snacks and savory snacks in China. Wilmar's wholly-owned subsidiary in China, Yihai Kerry Investments Co., Ltd, will participate in the joint venture.
Wilmar will contribute infrastructure, supply chain scale, an extensive sales and distribution network in China, as well as local China market expertise to the joint venture. Kellogg will contribute a portfolio of globally recognized brands and products, along with deep cereal and snacks category expertise. The Joint Venture will use the Kellogg's® and Pringles® brands. Together, Kellogg and Wilmar will leverage this complementary expertise to maximize marketing and manufacturing synergies.
China is expected to become the largest food and beverage market globally within the next five years, driven both by the growth of a middle class consumer base in large cities and an increased desire for a wide range of packaged and branded foods. Cereal consumption is currently being driven by rapid growth in milk consumption, along with consumers' desire for healthy and convenient breakfast foods. Snack foods also represent a very large growth opportunity.
" China's snack-food market alone is expected to reach an estimated $12 billion by year-end, up 44 percent from 2008," said John Bryant, Kellogg Company's president and chief executive officer. "To capture this growth, we will leverage the key strengths Kellogg and Wilmar bring to the partnership – the globally recognized Kellogg's® and Pringles® brands and deep category knowledge; scale and local market experience; and our mutual commitment to consumer-focused innovation."This joint venture positions our China business for growth and fundamentally changes our game in China. Our organizations have developed a strong working relationship and trust. I am pleased to be working together with Kuok Khoon Hong and his talented team, and have every confidence that our partnership will be a long-term success," concluded Bryant. Wilmar's Chairman and Chief Executive Officer, Kuok Khoon Hong, added, "This joint venture with Kellogg will complement our existing Consumer Product business and leverage on our extensive distribution network and support infrastructure in China. With our joint strength and shared vision, I am confident that we will be able to develop a leading cereal and snacks business together." The joint venture company will be headquartered in Shanghai, China. Launch of the joint venture is subject to customary conditions, including regulatory approvals by the Chinese government and anti-trust approvals.
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