Munchy acquires Zhenghang Food
Munchy Group has acquired Kellogg (Shandong) Food Co Ltd which effectively resulted in the former acquiring the business and assets of Zhenghang Food.
KUALA LUMPUR: Munchy Group announced it has recently acquired Kellogg (Shandong) Food Co Ltd from The Kellogg Company, which effectively resulted in the former acquiring the business and assets of Zhenghang Food.
In a statement here yesterday, Munchy said the deal was the first manufacturing asset acquisition by the group in China and is a significant milestone in its growth and an important strategic move for establishing its presence in that country.
The group, the owner of Malaysia’s number one homegrown biscuit brand, Munchy’s, is the country’s top wafer producer and the number two biscuit producer.
Earlier this year, Munchy signed a share purchase agreement with Kellogg for 100% of the latter’s equity in Zhenghang Food, a major Chinese manufacturer of cookies and crackers, founded in 1993 and located in the north and north-eastern regions of China.
Munchy Group chief executive officer C.K. Tan said: “We have been looking to establish ourselves in China for some time and have always believed in setting up or acquiring a manufacturing plant as the primary strategy to achieve this.
“The acquisition of Zhenghang Food is a golden opportunity as it is the second largest biscuit business in the Shandong province with excellent manufacturing facilities.
“The business will be run from the city of Qingdao in Shandong province, and will report to our corporate headquarters in Klang.”
Munchy’s purchase of Zhenghang Food comprises a manufacturing facility in Yishui county, Shandong province, as well as the company’s sales and distribution network.
With this purchase, the Munchy Group now has some 700 employees in China, including production staff and management personnel.
The group also has 1,300 employees in Malaysia, mainly stationed at its state-of-the-art manufacturing facility in Batu Pahat and head office in Klang. “Now that we have a base in China, we are looking to expand our distribution channels to export more of our premium product range into China, as we have been working with external partners for exporting to China so far,” Tan said.
“Likewise, we look forward to introducing the biscuits produced in China to our existing global network of customers in 60 countries.”
This will also be an excellent opportunity to share manufacturing expertise and good practices between the Zhenghang Food plant and the home plant in Batu Pahat, he said.
“This knowledge sharing also extends to our regional opportunity system for our personnel, where they will see more openings for international work experience at our base in China. At Munchy’s, we’ve always looked to be a global player, and with this new manufacturing facility, we expect our export revenue to grow beyond the current 35%,” said Tan.
Besides China, the group is also exploring opportunities in Indonesia in the near future, either individually or through joint ventures with established corporations. – Bernama