Inner Mongolia Yili Industrial Group, China's biggest maker of dairy products by sales, plans to spend 376 million yuan on a new factory in Sichuan province.
The plant would have production capacity of 430 tonnes of milk, 150 tonnes of yogurt and 260 tonnes of ice cream per day, Yili said yesterday. The company said construction would be completed in 12 months.
The project's internal rate of return, a measure of its profitability, would be 12.31 per cent, Yili said.
Competition is set to intensify as the country's third-largest dairy firm, Bright Dairy & Food, merged with three other major state-owned food companies yesterday.
Bright Dairy, in which Shanghai Industrial Holdings has a 25.17 per cent stake, said the new firm, Bright Foods (Group), had 45.8 billion yuan in assets and 28 billion yuan annual sales.
Yili embarked on a series of capacity expansions over the past two years under its new management led by president Pan Gang. It has spent more than two billion yuan to boost output last year and this year.
