DANONE Invests in Market Leading Chinese Fruit Juice Company

Groupe DANONE today announces that it has acquired 22.18% of the Chinese fruit beverages company China Hui Yuan Juice Holdings Co., Ltd (“Hui Yuan”).

This agreement reflects Groupe DANONE’s strategy of strengthening its position in the Chinese beverage market, where it achieved sales of over 6 billions litres in 2005.

With annual per capita juice consumption in China averaging 2 litres, compared with 11.5 litres in Hong Kong and Taiwan, the Chinese juice market offers promising scope for development. The average annual growth for the last 3 years has been above 15%.

Hui Yuan is the market leader in juice beverages market with a nationwide market share of 17% by value. In particular, it enjoys a very strong position in the health-oriented juice segments – Nectar and Pure Juice – with a market share of respectively 30% and 42%. As a result, Hui Yuan has developed an enviable brand image.

As its strategic partner, Groupe DANONE will help Hui Yuan accelerate its development in the fast-growing and profitable juice market in China. In return, DANONE will benefit from Hui Yuan's unique expertise in value-added juices.

With around EUR 13 billion of total sales in 2005, Groupe DANONE is the world leader in fresh dairy products and bottled water (in volume terms), and n°2 in the biscuit market worldwide. In Asia, Groupe DANONE posted sales of more than EUR 2.2 billion with strong positions in the water market (n°1 in packaged wate r in China and Indonesia) and the biscuit market (leader in Malaysia, India and China, n°2 in Indonesia).

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