Shanghai-based Bright Food Group has taken a major step towards its goal of building a global distribution network by setting up a new subsidiary in Hong Kong that aims to take more local brands abroad and bring more premium products to the mainland.
Bright Food, a household name in China where it is the second-largest food conglomerate, is striving to meet the growing demand among Chinese consumers for good quality international cuisine. It has made 10 major foreign acquisitions since 2010 as part of a drive to access more international markets.
“Buoyed by mainland consumers’ increasing demand for high-quality food, Bright Food will step up efforts to increase imports of foreign-made products,” Bright Food’s president, Liu Ping, told a forum on imported food during the China International Import Expo on Wednesday.
“Our internationalisation drive will continue, with a focus on bringing more premium brands to Chinese households.”
The new Hong Kong subsidiary, defined by Bright Food as its second headquarters, will deal with distribution of food around the globe and sourcing products for import to China.
Pan Jianjun, a spokesman for the company, said the Hong Kong unit will also be used as a financing vehicle to help fund other overseas acquisitions. He would not reveal the names of any potential targets.
Bright Food, as well as owning an eponymous dairy company, is the maker of the iconic White Rabbit confectionery and Australia’s Manassen Foods.
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Liu, 48, a former deputy governor of Changning district, Shanghai, underscored the importance of risk control when buying abroad.
“We always give priority to the safety of the assets,” he said. “An excellent management team is important for us when assessing the acquisition targets.”
People’s rising affluence and a series of food scares a decade ago sparked a global buying spree by Bright Food where former Chinese President Jiang Zemin had a brief stint in 1950s.
Since 2010, Bright Food has bought a clutch of foreign food businesses including Manassen, an Australian biscuit brand and the British cereal maker Weetabix.
The asset acquisitions were aimed at securing a greater supply of products to cater to mainlanders’ rising needs for imported food.
Mainland China imported food products worth US$61.7 billion in 2017, up 11.1 per cent from a year earlier, according to the China Chamber of Commerce.
The import value has risen by more than 15 times in the last two decades.
“Chinese people’s spending on imported food products will continue to rise as mainlanders are increasingly aware of health and safety of food,” said Shanghai-based angel investor and independent analyst Yin Ran. “Fine-tuning the distribution network is a sensible move to control costs.”
Bright Food reported sales of 160 billion yuan (US$23.5 billion) in 2017, and the 10 overseas businesses it acquired contributed about 25 per cent to its total revenue, Liu said.