Kellogg, Wilmar form JV to produce cereals and snacks in China

US-based cereal producer Kellogg and Singapore-based agribusiness company Wilmar International have entered into a 50:50 joint venture for the manufacture, sale and distribution of cereals, wholesome snacks and savoury snacks in China.

Wilmar’s wholly-owned subsidiary in China, Yihai Kerry Investments, will be involved in the joint venture.

For the new joint venture, Wilmar will provide infrastructure, supply chain scale, local market expertise, and its extensive sales and distribution network in China, while Kellogg will contribute a range of globally recognised brands and products, as well as cereal and snacks category expertise.

The joint venture company, which will be headquartered in Shanghai, China, will offer products under the Kellogg’s and Pringles brands.

Kellogg Company’s president and chief executive officer John Bryant said that China’s snack-food market is forecasted to reach approximately $12bn by year-end, up 44% from 2008.

Wilmar chairman and chief executive officer Kuok Khoon Hong said the joint venture will complement the company’s existing consumer product business and utilise its 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,” Hong added.

China is expected to become the largest food and beverage market globally within the next five years, due to an increase in the middle class consumer base in large cities and an increased demand for packaged and branded foods.

The joint venture is subject to customary conditions, including regulatory approvals by the Chinese government and anti-trust approvals.