The Yili Group, China’s leading dairy foods business, has acquired Chomthana, a major ice cream producer and distributor in Thailand. The $6.4 million transaction was consummated in Bangkok on November 29.
Chomthana, established in 1978, manufactures and co-packs a wide variety of frozen confectionery including tubs, novelties, cones and other impulse items sold under the Cremo brand, other proprietary names and retail private labels in 15 countries on four continents. Flavors range from conventional chocolate, vanilla and strawberry to tropical Asian fruit favorites including mango, durian, coconut and mango.
According to Statistia, the ice cream and frozen desserts market in Thailand will generate sales of approximately $484 million this year, with growth forecast at 4.3% per annum through 2021 and per capita consumption currently standing at 2.5 kg.
The deal is sealed for Yili’s purchase of Chomthana during an officially signing ceremony in Bangkok.Unilever Thai Holdings (Walls, Cornetto and Magnum brands) and Nestlé Thailand are the leading players, reports Euromonitor International, with Unilever commanding as much as 60% of the market.
In addition to ice cream, Chomthana also makes savory meat-filled and sweet steamed buns and Chinese-style dumplings (shu mai), and provides third-party cold storage warehousing in centrally located Pathum Thani and distribution services. Its fleet of over 200 refrigerated trucks delivers temperature-sensitive products across Thailand.
Acquiring Chomthana is an important move in Yili’s strategy “to gather global energy and deepen mutual benefit and achieve win-win situation,” said Zhang Jianqiu, chief executive officer of state-owned Inner Mongolia Yili Industrial Group Company Limited.
Chomthana’s Cremo brand tropical fruit flavors especially appeal to consumers in Southeast Asia.Headquartered in Hohhot, Yili generated sales topping RMB 68 billion (approximately US $10 billion) in 2017. Net profit amounted to RMB 4,654 million (about $670 million), and return on net assets has remained above 20% for a number of years.
The company has expanded its overseas activities in recent years, having opened a factory in New Zealand, entered into strategic partnership with Italian dairy giant Sterilgarda Alimenti S.p.A., set up a European R&D Center in the Netherlands in cooperation with Wageningen University, and engaged in cooperative efforts with universities and research institutes in the United States. – Reported by John Saulnier
