Global Times: Chinese aseptic packaging company accelerates domestic substitution by acquisition

18 January 2024

As one of the largest dairy and milk consumers in the world, with an annual industry growth rate of about 10 percent, China has in recent years set its sights on aseptic packaging, an unassuming but critical phase for the milk industrial chain, which aroused market attention as Chinese companies strategize to break foreign monopoly through business mergers and acquisitions.

Chinese leading aseptic packaging enterprise Shandong NewJF Technology Packaging Co., Ltd (NEWJF) announced in January 2023 its acquisition of a 28.22 percent stake in Greatview Aseptic Packaging and completed the acquisition in October of the same year, notably boosting NEWJF's competitiveness in the liquid product packaging market.

"From a macro point of view, the acquisition further enhanced China's food security and accelerated the domestic substitution in aseptic packaging sector," a representative from NEWJF, adding that the move also promoted a long-term steady development of downstream enterprises.

"NEWJF values this cooperation opportunity, and is willing to explore the aseptic packaging sector providing clients and industry with better services," said the NEWJF,"It is our right to appoint directors as the largest shareholder and we believe that diversifying Greatview's board of directors will expedite its sustainable development."

Founded in 2007, NEWJF, listed on the Growth Enterprise Market of the Shenzhen Stock Exchange in September 2, 2022, witnessed consecutive revenue growth from 2020 to 2022. Analysts believe that the acquisition will facilitate NEWJF in further exploring international markets.

NEWJF became qualified provider of aseptic packaging material for Yili in 2009 and it solidified its ties when Yili bought a 20 percent stake in NEWJF in August 2015.  While Yili's current stake has been reduced to less than 5 percent at present, it still remains NEWJF's largest client, generating 70 percent the packaging company's revenue.

Greatview Aseptic Packaging accounts for about 40 percent of products of Mengniu, and is also the core supplier of New Hope Dairy and its wholly-owned subsidiaries Xiajin Milk.

The acquisition helped NEWJF resolve overcapacity issues with Mengniu and enhance production efficiency by adopting a universal management system. The collaboration between the two leading companies also facilitated the healthy development of the industry, moving away from price wars.

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