By ZHAO Xiaojuan

Yashili International is to be privatized and delisted in Hong Kong. Yashili produces and sells dairy products in China and overseas, providing infant milk formula products and adult milk powder products. 

Mengniu – a dairy products and ice cream maker headquartered in Inner Mongolia - acquired a controlling stake in Yashili in 2013 to capitalize on the booming infant formula market. However, the company was tarnished by the 2013 Fonterra fiasco - a massive recall of products sold by dairy producer Fonterra after suspected botulism-causing bacteria were found during safety tests. Sales of formula crashed at that time. Sales revenue tanked and Yashili International reported net losses. 

In 2021, Yashili operated through brands such as Dumex, Doraler and Mengniu. Despite efforts to innovate and adapt to market dynamics, Yashili struggled to overcome challenges such as declining birth rates, intense competition, and increasing homogeneity in the infant formula industry.

The decision to privatize Yashili and delist it from the stock exchange provides Mengniu with an opportunity to restructure its infant formula assets, streamline operations, and seek potential synergies within the company. 

While Yashili’s delisting marks the end of its stock market presence, it also signifies a turning point for the company as it seeks to reshape its business strategy and refocus its efforts on innovation, product development, and channel cooperation.