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Kellogg strikes cereal and snack joint venture with Chinese monopoly Wilmar

By Kacey Culliney , 24-Sep-2012
Last updated on 25-Sep-2012 at 11:22 GMT2012-09-25T11:22:49Z

Kellogg and Wlimar to take on China's cereal and snacks category together...
Kellogg and Wlimar to take on China's cereal and snacks category together...

US cereal giant Kellogg has struck a 50:50 joint venture with Chinese agribusiness monopoly Wilmar International that will manufacture and sell cereals and snacks across the country.

The joint venture company will be headquartered in Shanghai and the launch is subject to regulatory approvals.

Two giants collide

The new business is set to harness strengths from both companies. Wilmar will contribute local knowledge on the Chinese market as well as a sturdy infrastructure, a sizeable supply chain and extensive sales and distribution network across the country. Kellogg will add its strong brand recognition and portfolio and underpin business growth with its expertise in the cereal and snacks segment.

“This joint venture positions our China business for growth and fundamentally changes our game in China. Our organizations have developed a strong working relationship and trust,” John Bryant, president and CEO of Kellogg said.

“China’s snack-food market alone is expected to reach an estimated $12 billion by year-end, up 44% from 2008… To capture this growth, we will leverage the key strengths Kellogg and Wilmar bring to the partnership,” Bryant said.

Kuok Khoon Hong, chairman and CEO of Wilmar International said: “This joint venture with Kellogg will complement our existing Consumer Product business and leverage on our extensive distribution network and support infrastructure in China. With our joint strength and shared vision, I am confident that we will be able to develop a leading cereal and snacks business together.”

For analyst insight on this huge partnership - see HERE .