Major Chinese dairy producer Inner Mongolia Yili Industrial Group Co Ltd is seeking to boost overseas sales as a way to cope with rising competition at home, executives said. Yili would likely report a "significant" increase in its overseas business in 2007, mainly in Southeast Asia and South Africa, said overseas project manager Yang Wai.
But price wars and excessive advertising budget growth in China's dairy industry could narrow profit margins. "The competition at home is cruel," Yang told reporters on the sidelines of a World Economic Forum meeting.
China's dairy industry has grown rapidly as Chinese consumption of milk, ice cream and yoghurt have surged. But competition is also rising, with top producers Yili, Meng Niu Dairy and Bright Dairy & Food Co vying for market share. Yili is likely to maintain sound business growth in full-year 2007, president and director Pan Gang said. He declined to provide a detailed forecasts.
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