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The Nestlé Group in China

Nestlé’s direct investment from Switzerland in Greater China has totaled RMB 7 billion. Nestlé Greater China is headquartered in Beijing and operates 21 factories, including four in Shanghai, three in Guangdong Province, four in Tianjin, three in Sichuan Province, two in Shandong Province, and one in Heilongjiang Province. , one in Jiangsu Province, one in the Inner Mongolia Autonomous Region, one in the Beijing area, and one in the Hong Kong Special Administrative Region. In 2001, Nestlé established the Shanghai Nestlé R&D Center in Shanghai. This R&D center is dedicated to applied science and technology and nutritional research, and the development of nutritious foods that Chinese consumers love and suit Chinese tastes and spending power.

The products produced and sold by Nestlé in Greater China include milk powder, liquid milk, infant formula, infant rice/wheat flour, sweetened condensed milk, growing-up milk powder, breakfast cereals, instant coffee, coffee mate, ice cream, chocolate and Candy, bottled water, drinks, chicken essence and condiments, etc. Nestlé Greater China is headquartered in Beijing, operates 20 factories in China, and employs more than 13,000 people in China. In 2008, Nestlé's sales in Greater China were RMB 14.3 billion, and its direct investment in Greater China totaled RMB 8.3 billion. As one of the first foreign companies to enter China, Nestlé has become one of the most loved and trusted brands among Chinese consumers.

Nestle's solemn commitment to Greater China: We will definitely work with the Chinese people to make our greatest contribution to China's brilliant future. Simao, Yunnan, is now one of the supply bases for Nestlé’s arabica coffee (the highest quality coffee). In order to build this base, Nestlé has been working here for 17 years. This is the fifth foreign agriculture manager stationed in the Simao area. Nestlé signed a 14-year agreement with the local government. Nestlé promises to purchase coffee according to the U.S. spot market price, as a guarantee for the interests of farmers, with no upper limit and a minimum purchase price. At the same time, Nestlé provides technicians, seedlings and even interest-free farm tools loans, and promises not to own land or fixed assets.

In 1992, the Ministry of Agriculture of Nestlé (China) Company officially moved to Simao, Yunnan. Five foreigners worked with local Chinese agronomists to teach local farmers about soil erosion control, environmental protection, pest and disease control, and high yields. Excellent production technology. Harvest and grow with farmers. Nestlé, which started dealing with Chinese farmers in 1989, already has its own way. In the Ministry of Agriculture of Nestlé (China) Company, farmers will get a very simple coffee planting brochure with very simple text. Most of them are detailed demonstration diagrams. This is specially provided by Nestlé for farmers to learn from. Production manual. Although Nestlé's acquisition requirements are extremely demanding, farmers also know that Nestlé is willing to pay the best price for the best quality. Farmers have also learned to consciously follow the instructions of Nestlé agronomists and strictly implement Nestlé's requirements. From the rejection of peeling picking and mechanized picking, the coffee must be picked by hand one by one. After the coffee has gone through steps such as peeling, fermentation, cleaning, soaking, drying, shelling, and grading, it can be packaged and transported to production companies in Dongguan. In order to ensure that monitoring is in place during transportation, Nestle uses trucks for long-distance transportation for 5 days and 5 nights, because there are many uncontrollable factors when changing trains during train transportation. Since Nestlé acquired Totole and other companies in China in the late 1990s, it has never made any large-scale investments in mergers and acquisitions. However, after the financial crisis in 2008, Nestlé began a huge strategic investment plan in China.

In the past two years, Nestlé has made frequent mergers and acquisitions in the Chinese mainland market. Before acquiring Hsu Fuji in 2011, Nestlé had acquired a 70% stake in Yunnan Shanquan, one of the top ten bottled water companies in China, and a 60% stake in Yinlu, which has the largest market share of domestic protein drinks and eight-treasure porridge. Such large-scale mergers and acquisitions have promoted Nestlé's business in Greater China to achieve rapid growth, and Greater China has become the fastest-growing regional market for its business worldwide.

In July 2011, Nestle announced that it would acquire 60% of Hsu Fuji's shares for US$1.7 billion. After the acquisition is completed, the Xu family will indirectly hold the remaining 40% of Hsu Fuji's shares. The price offered by Nestlé is equivalent to a 24.7% premium to Hsu Fuji's volume-weighted average share price over the past 180 trading days. Such a price is not cheap, but Nestlé's global revenue in 2010 reached 110 billion Swiss francs, and the acquisition price of Hsu Fu Chi was S$2.1 billion, less than 1% of Nestlé's market value. This huge transaction has a huge impact on Nestlé, which has a strong financial position. Said it can be ignored.

What Nestle values ????is that Hsu Fuji has a very sound distribution network in mainland China. Utilizing Hsu Fu Chi's existing sales network and channels can continue to sink Nestlé's products and expand the market faster and wider, thereby expanding the amount of revenue.

Nestlé’s chocolate and confectionery business lags behind competitors such as Kraft and Unilever in emerging markets, leaving Nestlé eager to expand market share through acquisitions. The sales of Hsu Fu Chi candy have ranked first in the market for 13 consecutive years, with a market share of 6.6% in China. After the merger, Nestlé's share of China's candy market will be greatly increased. Nestlé has surpassed Mars to become the number one in China's candy and chocolate industry. 1874 Nestlé Eagle Mark condensed milk is the first registered trademark in Hong Kong.

· 1908 Nestlé opened a trade office in Shanghai.

· 1920 Nestlé Products Co., Ltd. was established in Hong Kong.

· 1982 Nestlé Taiwan Co., Ltd. was established.

· 1984 Nestlé’s first office was established in Guangzhou;

· 1987 Nestlé’s first joint venture company, Nestlé Shuangcheng Co., Ltd., was established (Heilongjiang Province).

· 1990 Shuangcheng Nestlé Co., Ltd. was put into production.

· 1992 Nestlé Milk Hong Kong Co., Ltd. was established; Nestlé Dongguan Co., Ltd. was put into production.

· 1996 In this year, six more factories were put into production; Nestle's China headquarters was established in Beijing.

· In 1999, it established a joint venture with Totole Group in Shanghai (Nestle holds 80% of the shares).

· 2000Established Nestlé’s Greater China business structure (Mainland China, Hong Kong, Macau, Taiwan).

· In 2001, a joint venture agreement was signed with Haoji Group in Sichuan Province (Nestlé holds 60% of the shares); a Nestlé R&D center was established in Shanghai.

· In 2002, the Haoji joint venture began operations.

· 2004 Acquisition of Meilu’s milk factory in Ergun (Inner Mongolia Autonomous Region).

· In February 2010, acquired 70% of the equity of Yunnan Dashan.

· In April 2011, acquired 60% equity of Yinlu.

·In July 2011, it was announced that it had acquired 60% of Hsu Fu Chi shares for RMB 11.1 billion.