Malaysian snack maker buys Zhenghang Food from Kellogg

Malaysian snack manufacturer Munchy has acquired Chinese biscuit manufacturer Zhenghang Food, following its purchase of Kellogg (Shandong) Food, a Chinese subsidiary of US-based cereal maker Kellogg, for an undisclosed amount.

Munchy said that the transaction was its first manufacturing asset purchase made in China, and formed part of its strategy to establish its presence in the Chinese market.

Earlier this year, Munchy signed a purchase agreement to buy Kellogg’s 100% stake in Zhenghang Food. The acquisition includes Zhenghang Food’s manufacturing plant in Shandong province as well as its sales and distribution network.

Munchy chief executive officer CK Tan told news agency Bernama that the company has been seeking to establish its presence in China, and always considered setting up or acquiring a manufacturing facility as its primary strategy.

"The acquisition of Zhenghang Food is a golden opportunity as it is the second largest biscuit business in the Shandong province with excellent manufacturing facilities," Tan added.

Zhenghang Food will continue to be headquartered in Shandong province, and will report to Munchy’s corporate headquarters in Malaysia.

Through the acquisition, Munchy plans to increase the distribution channels to export more of its product range in China, and introduce biscuits produced in China to its existing network in 60 countries.

In addition to China, Munchy is also evaluating opportunities in Indonesia in the near future, either through a joint venture with established firms or individually.