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18 Nov 2018

CO-RO invests in Asia through Chinese acquisition

By the acquisition of the Chinese company JKD, the soft drink specialist CO-RO significantly reinforces its market position in China.

In China, the Danish soft drink specialist CO-RO has recently acquired the majority shareholding in Golden Creation Trade Co. Limited, also trading as JKD. The acquisition of JKD is a large two-digit CNY million investment and expected to generate a 30% growth rate in 2019 for CO-RO in China in the HoReCa sector (hotels, restaurants and catering).

Huiyuan distributor now part of CO-RO

JKD is a distributing company, holding brand distribution licenses for a range of products in catering, including a license to sell juice products under the brand Huiyuan; China’s leading juice brand.

CO-RO is the owner of the Sunquick brand which is the largest international brand in the HoReCa sector in China. Having the exclusive rights to sell both Sunquick and Huiyuan in the HoReCa sector, CO-RO is expecting to achieve growth for both brands.

Mr. Søren Holm Jensen, CEO of CO-RO, comments:

CO-RO’s acquisition of JKD perfectly underpins our growth strategy in Asia. The Asian market is very important to us, as it represents approximately 25% of our total turnover. In addition, the Chinese market is our largest one in Asia and clearly essential because of the high growth rate.

Deeper, wider, new

Acquiring JKD means that CO-RO can now tap into the vast distribution network of JKD. In fact, the point of sales in the catering channel doubles and the product range widens, too, as JKD not only sells juice, but also a range of other products. Further, JKD is the exclusive distributor of juice products under the Huiyuan brand to hotels, restaurants and catering businesses in China.

“CO-RO is very pleased with the acquisition of JKD; a strategic step which enables us to realize growth as part of our general expansion plan for Asia. It is a great opportunity for increasing our Asian footprint with China as spearhead,” Mr. Søren Holm Jensen says.

Prospective synergies

During 2019, CO-RO and JKD will become integrated as one which over time will allow for significant synergies.

CO-RO has key production plants in China, Malaysia, and Sri Lanka, where the trademark Sunquick enjoys a position as brand leader. The plant CO-RO Food (China) is situated in the southern part of China, whereas JKD has a strong foothold in the northern part. Having acquired JKD, CO-RO is now the only player on the Chinese market with a national distribution network of concentrated juice to the HoReCa sector. Further, the acquisition paves the way to a strategic cooperation with Huiyuan.

For CO-RO, the deal with JKD is a first time ever in terms of growth through acquisition abroad and throughout the transaction, CO-RO A/S was advised by Shiyao Investment Ltd.

About CO-RO

CO-RO A/S is a Danish company specializing in high quality fruit-based soft drinks and owner of a range of internationally known brands including Sunquick. CO-RO was founded in 1942 and is fully owned by a foundation, CO-RO’s Fond. CO-RO has business partners in more than 80 countries. CO-RO entered the Chinese market through a local agent in 1986, and a fully owned company since 2001.

About JKD

JKD was founded in 2011 by the former VP of Sales & Distribution at Huiyuan Group, Mr. Andy Lee. The Huiyuan Group has been the main joint venture partner of JKD and key licensor of the Huiyuan trademark.

About the transaction process

Throughout the transaction, CO-RO A/S was advised by Shiyao Investment Ltd. Shiyao Investment Ltd provides strategic advisory and investment banking services with a strict focus on the complete supply chain of agribusiness, related life sciences, food and beverage production and distribution in Greater China and Japan.