The brand, Arla Mengniu, will debut in the Chinese market this summer. Milex will be launched later in the year which will represent the company’s top range.

When Arla set up in China half a year ago, its partner, Mengniu, supplied approx. 80 different product lines and four brands within the milk powder segment. Today, only the 30 most profitable lines remain while the four brands are being reduced to two.

”Rationalising the range has been a key priority during the first six months in China,” says Jais Valeur, Managing Director of the Arla Mengniu joint venture. ”In future, we’ll market our products under the brands, Arla Mengniu, which will represent our mid-range products, and Milex, which will be for our premium products.”

The first product under the Arla Mengniu brand will be retail packed milk powder in 25g packs. Simply by adding hot water, the consumer will get a glass of hot milk quickly and easily.

”Milk is mainly drunk hot in China,” says Jais Valeur. ”Our product will make it easier and more convenient for consumers and we have great confidence in it. The portion packs also mean that it is easy for consumers to bring them along to work, for instance.”

Four new production lines for the product will soon be installed at the dairy outside the city of Hohhot in North Western China. The launch will take place in August when the product will be sold in packs containing 16 portions.

The end of the year will see the launch of the Milex brand, initially in three major cities in Southern China.

”Each of the launch cities has around 9 million inhabitants so this will be a complex exercise,” says Jais Valeur. ”A major challenge lies in recruiting many new sales representatives and product demonstrators.”

Jais Valeur expects Arla Mengniu to sell close to 8,000 tons milk powder to the Chinese retail trade in 2006. If this target is reached, it will mean that the Hohhot diary’s current capacity will be fully utilised within a short space of time.

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