Liwayway Group buys Spain’s Cola Cao business in China

Deal worth $13 million 

MANILA, Philippines – Filipino-owned snack food maker Liwayway Group of Companies is braving the economic headwinds in the world’s second largest economy, recently completing a $13-million acquisition and embarking on more expansion in China.

While most manufacturing firms are exiting China due to its slowing economy and rising labor costs, the homegrown firm behind the Oishi brand has seen these as opportunities to further strengthen its grip in the Chinese market.

In an interview, Liwayway chairman Carlos Chan told The STAR the company has recently acquired Spain’s Cola Cao business in China in a transaction costing between $12-to $13-million.

Cola Cao is a chocolate drink manufactured by Spanish firm Idilia Foods, a company that has decided to move out of the Chinese market.

Chan said Liwayway plans to invest about $7-to $8-million more to put up new lines in the acquired Cola Cao factory in Tianjin.

The Liwayway Group is expected to continue Cao Colas business in China to add to its portfolio of more than 100 snack food and beverage products.

Aside from the acquisition of Cola Cao, Chan said the company also intends to add more to its 16 existing plants in China.

“We’re going to put up at least one plant in Southern China. The land is already given to us so we have to build. This year we will start development and in two years it will be operational,” he said.

Chan said the Liwayway Group has been fortunate to maintain last year the growth it posted in China in 2014, despite challenges in the country’s economy.

“We’re still expanding in China and in Southeast Asia a lot,” he said.

Aside from Shanghai, the company has snack-making plants in 14 other locations around China such as in Harbin near Mongolia and Xinjiang near Kazakhstan.

The Liwayway Group also has plants in the Philippines, Vietnam, Myanmar, Thailand, Indonesia, Cambodia and India.

The company started in the Philippines in 1946 by selling starch and coffee and then expanded into the snack food business several decades after.

It ventured in China in 1993, marking the start of the company’s international expansion.