BRIGHT Food (Group) Co yesterday formed a strategic partnership with Indonesia's Salim Group to cooperate in the production of cane sugar and dairy products as it focuses on expanding overseas.
Bright Food, the nation's biggest food group, will invest jointly with Salim, the biggest conglomerate in Indonesia, in food products, distribution and purchasing in the two countries, said Wang Zongnan, chairman of the Chinese firm.
"The overseas expansion will offer us more control and is in line with our goal to be a globally competitive player," said Wang.
The cooperation may include importing Salim's cane sugar from Indonesia and jointly setting up a venture to operate a cane sugar-processing plant in the Southeast Asian country.
In dairy products, a priority for Bright Food's development, Salim is also expected to share its technology and management on raising cows and invest in Bright's biggest cow farm.
Bright Food planned to invest 1.5 billion yuan (US$198.5 million) to establish a farm in Dafeng, Jiangsu Province. The Haifeng farm will raise 10,000 cows by next year and eventually boost the figure to 30,000.
Analysts said Bright Food will also gain from Indonesia's low business costs which will help its price competitiveness in a maturing domestic dairy market that is dominated by Inner Mongolia-based Mengniu and Yili.
An affiliate of Bright Food, Maling Canned Food Factory, has a processing plant in the Czech Republic and some raw materials used by Bright Dairy Co to make milk powder and cheese come from New Zealand.
Last year, Bright Food generated a sales revenue of 41.3 billion yuan. Indonesia-based Salim's sales revenue totaled US$2.5 billion last year.