Thursday, September 19, 2013

Chinese Food Companies Looking Overseas for Acquisitions

Acquisitions and mergers such as those done by Pork producer Shuanghui International Holdings Limited have made inroads in China that are groundbreaking. The trend in the food industry is that Chinese food companies are choosing to venture abroad for acquisitions that will aid them supply the increasingly wealthy and astute customers, who now consist of the world’s largest market for groceries. Consumers are not just looking for cheap brands but also they want quality brands. Food companies that plan to exist in China – or the world at large – must embrace these facts. Pork producer Shuanghui International Holdings Limited for instance plans to acquire Smithfield Foods Inc, the world’s largest pork company while some companies are looking for foreign partnership. This strategy is not just the trend, but also a way to remain relevant in the market, keep the profits up, and have competitive advantage. This strategy also improves quality and higher standards on brands through integration as foreign brands are viewed to be of higher standards. There is less value for most companies by buying smaller competitors within their boundaries than opting for bigger opportunities overseas so that they are able to market on a worldwide scale in order to achieve global objectives and gain a competitive advantage.

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