November 15, 2013

Inner Mongolia Yili Industrial Group Co (Yili) has formed a strategic partnership with Italy's Sterilgarda Alimenti SpA, allowing Yili to enhance its technological capabilities and develop quality milk products.

Sterilgarda Alimenti is a leader in UHT milk and cream production in Italy and specialises in filter-membrane technology. The technology removes harmful bacteria and impurities, which enables fresh milk to be stored for up to eight months without preservatives while maintaining the nutritional value.

CEO of Sterilgarda Alimenti, Fernando Sarzi, commented that the two companies will deepen cooperation in various aspects.

Yili's CEO Zhang Jianqiu said that the diverse consumption demand is driving Chinese dairy producers to expand overseas. "Chinese consumers have grown more and more similar to international consumers in terms of dairy consumption behavior."

Earlier this year, Yili invested RMB1.1 billion (US$180.55 million) in a New Zealand dairy production base, which makes baby formula for the Chinese market. The company has also formed a partnership with the largest dairy organisation in US - Dairy Farmers of America Inc. for collaboration in the procurement of raw material and management of dairy farms.

While in the domestic front, Yili is expanding its production capacity. In an effort to secure milk supply, the company announced an investment of US$50 million in Huishan Dairy Holdings Co. in September.   

Yili posted an operating income of RMB36.57 billion (US$5.99 billion) in the first three quarters of 2013, topping the performance chart of Chinese dairy companies.

During the same period, Yili's net income totalled RMB2.525 billion (US$413.88 million), soared by 82.7% on-year.