State-owned Bright Food Group has shifted its focus from chocolate and biscuit makers to food distributors as it seeks foreign acquisition targets to quicken its globalisation drive, according to its vice president Ge Junjie.
The mainland's second-largest food group is likely to land a new investment deal in Europe, which would help Bright Food create an internationalised platform for a two-way traffic - bringing in Western quality food to the mainland while promoting Chinese products worldwide, he told the South China Morning Post.
"Buying just foreign processers of candy, biscuits and chocolate is no longer in line with Bright Food's long-term strategy now that we have owned companies like Manassen [of Australia]," Ge said. "We are now strengthening efforts to create a synergy between our domestic businesses and overseas assets."
The vice president of the Shanghai food giant, who is also a delegate to the National People's Congress, said that a weak euro, soaring Chinese demand for imported food products, and overseas firms' rising awareness of the mainland market were the driving forces for Bright Food's accelerated go-global campaign.
"Bright Food aims to be a multinational food giant," Ge said. "We are not just splashing out massive amounts of funds to acquire all kinds of foreign food businesses. We hope to bring in capable managers and good management styles to enhance our governance."
Bright Food began to actively seek overseas acquisitions in 2011 in an effort to bring safe and healthy food to the mainland following a series of food scares. To date, Bright Food has sealed six foreign investments including a 56 per cent stake in Israel's Tnuva Food Industries it bought for US$960 million last year.
"Chinese people's interest in foreign food products is huge, and we fully understand the market demand," Ge said. "For the next step, we will also use the platforms to sell Chinese products around the world."
"In the next three years, we will looks for similar investments in North America, Southeast Asia, Australia and New Zealand," he added. "A globalised distribution network for Bright Food will take shape after consolidations of the acquired businesses." Bright Food has started preparations to list its overseas assets, including Manassen, which it purchased for A$530 million (HK$3.1 billion).
"In five years, our businesses outside the mainland should account for 20 per cent of the total from the current 10 per cent to justify our goal of becoming a multinational firm," he said.