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Nestlé to become bouillon market leader in China

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Nestlé S.A has reached an agreement with the Totole Group, the market leader in chicken bouillon in China, to acquire 80 percent of the share capital of Shanghai Totole Flavouring Food Co. Ltd., and Xi'an Totole Flavouring Food Co. Ltd., which operate three production centers and employ some 700 people in China.

The agreement is subject to the usual approval procedures by the authorities of the People's Republic of China. The cost of the transaction was not disclosed. Totole's sales volume is around CHF 40 million. The acquisition is a further milestone in the development of Nestlé's culinary business in Asia, as it will make Nestlé the market leader in the fast-growing bouillon market in China, which is expected to become the largest bouillon market in the world within the next ten years.

The Totole Group also manufactures other culinary products such as enhanced MSG (monosodium-glutamate) and soy sauce. All products are being sold under the Totole brand, which is much appreciated in China and is included in the transaction. Nestlé will extend its worldwide know-how and expertise to Totole, while the founder of the business will continue to manage the operation.

This strategic acquisition will complement Nestlé's wide portfolio of food and beverage products in China, where the Group currently operates 15 manufacturing facilities and employs about 5,000 staff. It also demonstrates Nestlé's strong commitment to China, where the company already enjoys a well-established position and very encouraging growth.