China’s Inner Mongolia Yili Industrial Group to invest in New Zealand

Inner Mongolia Yili Industrial Group, one of China’s largest dairy producers has unveiled two billion yuan investment plans in New Zealand.

According to the Xinhua news agency, the Inner Mongolia Yili Industrial Group Co Ltd has announced that its Oceania production base in Waimate, south of Timaru, will take just over half the cash. The investment will cover packaging, production, processing and research and development.

Yili say Waimate, into which it has already invested 1.2bn yuan, will be the largest integrated dairy production base in the world.

Xinhua said Yili’s move comes as increasingly more Chinese customers prefer overseas dairy products as the reputation of local brands was damaged in the melamine-tainted baby formula scandal in 2008.

Yili was affected by the scandal after tests found its infant formula contained melamine. It recalled the milk and apologised to the public. At the time, its share price crashed and it was stripped of a state status as ‘Chinese national brand’. No child was ever confirmed as being ill as a result of drinking Yili milk.

The second phase of Yili’s New Zealand investment will include a raw milk processing plant, a UHT milk plant, a milk powder plant and a packaging plant.