Huishan plans 2.5b yuan dairy industry investment in Jiangsu
China Huishan Dairy, a mainland milk producer backed by billionaire Cheng Yu-tung, on Tuesday announced a plan to establish a vertically-integrated dairy value chain in Jiangsu province for distribution of its products in Eastern China, with a total estimated investment of up to 2.5 billion yuan (HK$3.1 billion) in the next four years.
The dairy producer, which listed in Hong Kong last year, said it had reached a non-legally-binding agreement with the Sheyang county government, which would help it acquire land and other facilities needed to build up the a value chain including feed growing, dairy farming, processing, sale and marketing in Yancheng, Jiangsu.
Mainland private equity firm Nantong Zongyi Investment, Huishan’s working partner and bondholder, will take a 35 per cent stake in a joint venture to be set up for implementation of the project, Huishan said in a statement to the Hong Kong Stock Exchange.
“These agreements represents a milestone in the group’s strategic plan to expand and penetrate into geographical end-markets beyond Northeast China, and to take the group a step closer to achieving its ultimate goal of expanding its operations throughout the national dairy market in China,” Huishan said.