The milk outflow rate will reach 60% during the year

Yesterday, the reporter learned from a source familiar with the situation that the details of mergers and reorganizations of the dairy industry, which have attracted attention in the industry, have begun to appear. According to the plan, China will probably only retain 50 infant formula milk powder manufacturing enterprises in 2018 to “strictly control” the quality and safety of milk powder and greatly increase industrial concentration. Considering that there are currently as many as 128 similar companies in China, there will be 60% of the "outflow rate" within 5 years of conversion. It is expected that leading enterprises in the industry will become "winners."

Industry: Milk Powder Enterprises

From 80 to 50 transitions

Yesterday, according to the above-mentioned sources, it was disclosed to this reporter that the details of the plan to promote the merger and reorganization of dairy products stipulated that by 2015, 80 infant formula milk powder production enterprises will be retained. By 2018, this number will further decline to 50.

However, as of the time of the press release, the plan was not published in the official channels. According to media reports, the rules were developed by the Ministry of Industry and Information Technology. The above-mentioned sources stated that the plan is to encourage advantageous small and medium-sized enterprises to merge, reorganize, or form industrial alliances. However, the implementation of mergers and acquisitions companies has imposed stricter restrictions, and this will be mainly reflected in their financial requirements.

This person further pointed out to this reporter that by 2015, domestic milk powder companies must completely complete the company's 100% "GMP certification." Prior to this, the country will "control milk powder according to the standards of medicines" and it has become a new trend that the industry is highly concerned about.

"This approach should be to increase the concentration of the milk industry." Analysis of the above said.

Leading dairy industry is good

SMEs form the target

Earlier, Wang Liming, director of the Consumer Products Industry Department of the Ministry of Industry and Information Technology, disclosed that the concentration of the domestic infant formula milk powder industry is currently 43%, and efforts should be made to increase it to more than 60% within two years and to over 75% after five years.

In this context, Mengniu Dairy, which is operated by COFCO, a state-owned enterprise, has announced that it has acquired Yashili, a leading milk powder company in Guangdong, for more than HK$11 billion. The milk powder revenue has soared by more than RMB 3 billion.

Once the plan calls for companies such as mergers and acquisitions to be profitable for three consecutive years, only a handful of large dairy companies are expected to meet the industry's standards. This also means that domestic milk powder has accelerated into the “two points of the world” era of the giants Yili and Mengniu.

“Is this true?” said a person in charge of a domestic medium-sized milk powder company yesterday told this reporter that he did not see the above rules, but will pay close attention. The source of the above-mentioned sources pointed out that the by-laws are to reward the “actively withdraw from the market”.

Senior dairy expert Wang Dingmian said that the quality of China's dairy industry should continue to be stable. The first is to cancel the permit for the production of infant milk powder by a single dry process, and the other is to raise the level of farming and establish a cycling and agricultural ecological base.