Yili group has sold its Shihezi milk powder processing plants. Shihezi – a subsidiary that produces infant formula – is located in the remote north-western province of Xinjiang. The company has been sold to Xinjiang Western Animal Husbandry.
Yili plans to use more milk powder sourced from overseas in its infant formula products. Its NZ "Oceania Dairy" plant can produce infant formula more efficiently than the Shihezi operation.
Oceania Dairy, located at Glenavy, South Canterbury, began processing milk a year ago. Yili initially invested $236 million in the factory. It also plans to invest a further $400 million in the South Canterbury factory over the next five years, increasing its total investment to in excess of $600 million.
In its first season of operation, Oceania Dairy received and processed 206 million litres of milk and produced 32,000t of milk powder.
The bulk of the powder was exported to China, generating US$90 million of export revenue.
BG Agri reports that in 2014 Yili's Shihezi subsidiary operated at a loss in 2014. Its 2014 revenue was 230 million yuan (NZ$45 million) but it recorded an operating loss of 830,000 yuan (NZ$162,000).
