Food processing growth in China prompts Alfa Laval acquisition

By Rory Harrington

- Last updated on GMT

Related tags: Alfa laval, Economy of the people's republic of china, Food, Food processing

Alfa Laval Group has acquired a majority stake in a leading Chinese fluid handling company as it seeks to capitalise on growth in the country’s flourishing food processing industry.

The Sweden-based company announced Friday it had bought a 65 per cent share in Si Fang Stainless Steel Products Co, which targets a wide range of segments in China’s food and beverage market. The firm specialises in sanitary products such as pumps, valves and fittings. Last year it posted sales of around SEK150m (€15.5m) and has 300 employees.

No financial details were disclosed about the deal which was finalised on 1 April. Alfa Laval said while its majority stake gave the opportunity for investment it was still too early to say if, or when, further cash would be pumped into the Chinese acquisition.

Alfa Laval CEO and president Lars Renstrom said the takeover fitted in with the company’s strategy to “capture structural growth opportunities”.​ The new company would drive profitable growth by adding an independent channel to the expanding food and beverage market in China, said the Alfa Laval chief.

Si Fang will continue to trade under its brand-name, as well as offering its products through its own sales network.

“We are constantly seeking to identify structural changes in demand in emerging markets such as China and India,”​ company vice president of communications Peter Torstensson told FoodProductionDaily.com. “The emerging middle classes and growth in living standards in these countries has seen an increased demand for processed foods. This increases total demand along the supply chain and we have lots of equipment that can be used to meet this growth. We are constantly monitoring such trends.”

Alfa Laval said China is the world’s largest food producer – which is also fuelling demand growth in the processing industry. The acquisition fits with company strategy because it will provide an added sales channel in a market with huge potential.

“We believe opportunities in China will be substantial and this purchase is significant because it is one of the first major companies we have bought in China,”​ added Torstensson.

Related topics: Processing & Packaging

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