Bloomberg News

Danone Suspends Shanghai Yogurt Factory in China Strategy Review

December 10, 2011

Dec. 8 (Bloomberg) -- Danone SA, the world’s biggest yogurt maker, suspended production of the product at its Shanghai plant as the company evaluates its strategy in China.

Danone will continue to produce yogurt at its Beijing factory in a refocus of its efforts in the country, a “key strategic market,” the Chinese unit of the Paris-based company said in an e-mail today.

“In the future, we will adopt a more focused approach on building Bio as a strong value-added brand and focusing our efforts and investments on main cities including Shanghai and Guangzhou,” Danone said, referring to its yogurt brand.

The French foodmaker, also the owner of the Evian and Volvic brands, said the changes don’t involve its other businesses, such as water, beverages and baby nutrition.

The Financial Times earlier reported Danone was shutting the Shanghai plant to concentrate on more upmarket offerings. Nestle SA is also closing one of its three ice cream factories in mainland China, the newspaper said.

“Nestle continuously reviews its ice cream operations,” it said in an e-mailed response to queries on the report. The Vevey, Switzerland-based company said it will share information “at the appropriate time” should a review lead to business adjustments.

--Jasmine Wang, Michael Wei, Editors: Lena Lee, Garry Smith

To contact Bloomberg News staff for this story: Michael Wei in Shanghai at mwei13@bloomberg.net

To contact the editor responsible for this story: Stephanie Wong at swong139@bloomberg.net


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