Photo/Zhang Xiaoqing (NBD)

Mar. 12 (NBD) – Nestle, a Swiss food and beverage company, has chosen JPMorgan Chase & Co. to handle the sale of its Chinese unit Yinlu Foods Group, which is famous for ready-made Chinese porridge and peanut milk, Bloomberg reported on Thursday. 

Nestle plans to offload a majority stake in Yinlu and retain a small holding to oversee the production of Nescafe's ready-to-drink coffee, which Yinlu co-manufactures in China. The first-round bidding is expected to start in late April or early May, and Nestle is now reaching out to potential buyers including Chinese food and beverage company Wahaha Group, said the report.

The company has declined to comment on the news. And when reached by news outlet Cailianshe on Thursday, Zong Qinghou, chairman of Wahaha Group, denied the matter. 

National Business Daily (NBD) noticed that among all businesses of Nestle in China, Yinlu was almost a drag on the Swiss company.

On February 13, Nestle released the financial report of 2019. The company reaped CHF 92.568 billion (95.6 billion U.S. dollars) in global sales volume last year, up 1.23 percent year on year. In the Greater China Region, the sales volume reached CHF 6.913 billion (7.15 billion U.S. dollars), accounting for 7.5 percent of the global total and partly benefiting from the Chinese New Year holiday sales in the fourth quarter of last year.

For the year, Yinlu's peanut milk and congee continued to see a decrease in sales while Nestle's other businesses in the country including culinary, coffee, ice cream and infant nutrition all registered positive growth.

Nestle reviewd Yinlu's strategy, portfolio and business plans due to challenging competitive environment and the weak-than-expected results of the unit. "The 2019 impairment charge of goodwill and intangible assets mainly relates to Zone AOA (Asia, Oceania and sub-Saharan Africa) and more specifically the Yinlu (peanut milk and canned rice porridge) business in China," stated Nestle in the report.

It's noticeable that Nestle already made effort to improve Yinlu's business. In January this year, Nestle named Sun Yinong the new CEO of Yinlu. Sun is former chief operating officer at Coca-Cola Bottling Investments Group China.

Email: lansuying@nbd.com.cn