Yili Group - or more correctly Inner Mongolia Yili Industrial Group - is China's biggest dairy producer, the #1 across Asia in that sector and now the #5 globally behind Nestle, Lactalis, Dairy Farmers of America and Danone. In China it has around 22% share of the local dairy sector; main rival Mengniu has around 17%. Yili operates in four main segments of liquid milk, formula milk powder, chilled yoghurts and yoghurt-based drinks, and ice cream. Key products include Yili-brand, Satine and Ambrosial milk and yoghurt, Pro-Kido milk powder, Chang Qing and Mei Yi Tian drinking yoghurts, and Chocliz and Gemice ice creams. In 2016, it attempted to acquire a controlling stake in China's leading organic dairy Shengmu, but the deal was blocked by regulators. Although the majority of its business is generated in the domestic market, Yili has begun to establish a wider international presence, with local operations in New Zealand, Indonesia and Pakistan, and a partnership in Europe with Italy's Sterilgarda. Recent acquisitions have included New Zealand's second largest dairy co-op Westland and Thai ice cream producer Chomthana, both in 2019. Yili also has R&D facilities in the Netherlands and the US. Revenues have grown steadily since 1996, reaching approx $13.4bn in 2019. Net profit topped $1bn. All Chinese dairy producers were tarnished by contamination scandals in the early 2000s when locally produced milk powder was found to be adulterated with chemicals, poisoning thousands of babies. As a result, Yili and other local producers lost considerable share to foreign brands in the infant formula segment, and have been unable to regain their former position. However Yili remains very strong in other segments, especially liquid milk which accounts for the largest share of its revenues. Pan Gang is executive chairman & CEO. His predecessor Zheng Junhai was jailed in 2006 for fraud and embezzlement, and has been accused by Yili of being behind a series of malicious rumours about the company since his release in 2012. Two journalists were arrested in 2018 for defamation of the company and CEO Pan. Yili Group is publicly quoted, but the Chinese state retains a controlling share. It launched in 1993 as a small dairy processor in Mongolia but expanded rapidly over the following decade. It was a key sponsor of the 2008 Beijing Olympics, and will also sponsor the 2022 Winter Olympics.
Capsule checked 20th November 2020
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