BRIGHT Dairy & Food Co Ltd said it has completed the sale of its stake in Shanghai Kedi Convenience Store Co Ltd as part of its restructuring program to focus on dairy business.
The nation's third largest dairy maker has sold its 81-percent stake in Kedi to NGS Supermarket (Group) Co Ltd for 226.8 million yuan (US$30.6 million), Bright Dairy said in a statement filed to the Shanghai Stock Exchange yesterday.
Bright Dairy will no longer be involved in the retail business after the equity transfer and the deal also will help avoid internal competition against other affiliates of its parent company, the statement added.
Shanghai-based NGS is the city's leading operator of supermarkets and chain stores. Both Bright Dairy and NGS were owned by Bright Foods (Group) Co Ltd. Industry analysts said withdrawing from its non-core business will further help Bright Dairy to focus on developing its dairy business, especially now that it ended its cooperation with France's Groupe Danone two months ago.
Dairy makers in China are increasing capacity to meet a growing demand for dairy products thanks to rising income of the population which is helping to boost sales.
Demand for dairy products is expected to rise at an annual rate of 12.8 percent to reach 38 million tons by 2010.
Kedi, the convenience store chain founded in 1995, now operates 1,200 outlets in Shanghai and Jiangsu and Zhejiang provinces in east China.
It is among one of the few profitable convenient store chains in China.