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Feihe Intl -- >>> China’s Baby Formula Makers Gain on Foreign Producers


By Ben Levisohn

Dec 31, 2012



http://blogs.barrons.com/emergingmarketsdaily/2012/12/31/chinas-baby-formula-makers-gain-on-foreign-producers/?mod=yahoobarrons




It’s taken four years but China’s consumers might be gaining more confidence in local baby-formula producers.


BloombergRemember: In September 2008, more than 6,000 Chinese babies fell ill after drinking contaminated formula. But Oppenheimer’s Ingrid Yin reports that China’s largest domestic producers gained 1.4 percentage points of market share in October.

Among foreign producers, Group Danone’s Dumex lost 0.9 percentage point, Mead Johnson (MJN) gained 0.1 percentage point, Abbott Laboratories (ABT) gained 0.6 percentage point, and Nestle and Pfizer’s (PFE)Wyeth together lost about 0.4 percentage point. Dumex now has 12.6% of the China market, Mead Johnson has 13.1%, Nestle has 5.6%, Wyeth has 9.4% and Abbott has 6.7%.

Local producers Feihe International (ADY) gained 0.4 percentage point, and Inner Mongolia Yili Industrial Group gained 0.6 percentage points despite a recent safety scandal, and now has 9% market share. Synutra International’s (SYUT)4.9% market share was unchanged.

But expect competition to heat up, Yin says. More foreign companies are entering the market, including Denmark’s Arla Food. And Chinese companies are looking outside their borders: Yili’s set to purchase a New Zealand’s Oceania Dairy in order to build a baby formula factory.

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