Reuters reporter interviews Ge Junjie during China’s ‘two sessions’

NPC & CPPCC in Spotlight: China’s Bright Food Sets to Expand Its International Business by Merging and Acquiring Assets in the Sugar and Wine Sector

*Among others, sugar, wine, dairy and global distribution networks are the key sectors for Bright Food’s M&A efforts

* The share of Bright Food’s international sales in its total revenue will rise from 15 to 25 percent in the next three years

* Bright Food’s revenue is expected to reach 150 billion yuan by 2015

Reuters, Beijing, March 7 - Bright Food (Group) Co., Ltd., one of the biggest food groups in China, is determined to continue implementing its globalization strategy. Bright Food has completed four international M&A deals in the past three years, said a senior executive of the company on Thursday, and now it is seeking more M&A opportunities in sectors like sugar, wine, dairy, and global distribution networks. Besides, Bright Food will strengthen the mutual development between the international business and the domestic market, further boosting the revenue contribution ratio of its global business.

In an interview with during the interval of the NPC and CPPCC sessions, Bright Food’s Vice President Ge Junjie said that the company aims to bring the revenue contribution ratio of its global business up from around 15 percent at present to about 25 percent three years later.

“Our journey towards internationalization has just started. As planned, international expansion will be one of our key strategies from 2013 to 2015,” said Mr. Ge. Bright Food targets to secure a 12 percent compound annual growth rate in its revenue within the next three years, with the total revenue expected to reach 150 billion yuan in 2015.

In the future, Bright Food’s M&A efforts will be targeted at sugar, wine, and dairy sectors, European branded food and snacks, leading healthcare enterprises, global distribution networks, as well as professional purchase systems. Regarding the target area, Bright Food will focus its attention on Europe, Australia and New Zealand, as those are home to the international brands already acquired by Bright Food. As a result, Bright Food will enjoy an overseas business cluster, which will be conducive to its internal management.

“The oversupply of sugar in the global market over recent years represents a good opportunity for our international expansion,” added Mr. Ge. “Besides, the per capita sugar consumption will rise steadily in China.” According to him, Bright Food will pay special attention to potential opportunities to merge or acquire sugar firms in Brazil, Southeast Asia and Australia.

He said that Bright Food’s international strategy should conform to the following principles: being in line with the company’s overall development strategy; huge synergistic effect with the headquarters in China; reasonable price; controllable risk and excellent management teams. International expansion does not only mean going abroad for M&A or equity participation in the overseas-based enterprises. It is more about importing advanced ideas and business models, establishing or joining the global purchase and distribution networks, enhancing brand image and R&D capability, and getting access to more financing means in the global capital market.

At present, Bright Food has four companies listed on the A-share market as represented by Bright Diary & Food and Jinfeng Wine. The company is still considering the possibilities of building a platform to attract overseas capital, as a measure to implement its international strategy. “We are actively working to get listed overseas,” said Mr. Ge.

Speaking of food safety in China, Mr. Ge agreed that many customers lack confidence in China’s food safety. In fact, he pointed out, food safety is by no means a concern of food manufacturers; instead, it is a systematic social project involving the whole industry chain and related government regulatory authorities.

According to Mr. Ge, Bright Food has forged a complete chain ranging from cow breeding and dairy production to product distribution. With over 50,000 cows, Bright Food now is in a good position to meet the major demand of its dairy products. In addition, Bright Food has recently entered the feedstuff sector, representing a further step to better control food safety.

“It’s our mission to win the whole world’s trust in the safety of our food products,” declared Mr. Ge.