Weetabix tech vital in £1.2bn China sale

Weetabix’s advanced technology systems are a crucial factor in its future operational success, according to the state-owned Chinese firm that today acquired a controlling stake in the cereal maker for £1.2 billion.

Bright Food, a Shanghai-based company that is one of China’s largest food groups, today bought a 60 percent stake in Weetabix from Lion Capital. The acquisition sees Bright Food also take control of Weetabix-owned brands Alpen muesli and Ready-Brek.

Bright Food said in a statement that its acquisition of Weetabix would reflect the Chinese firm’s strategy of “buying famous international brands, developing advanced technology and taking strong competitive positions in each of its markets”. It is also understood to be the largest overseas acquisition in recent years by a Chinese company in the food and beverage sector.

Weetabix has invested heavily in systems in recent years. Last August, the company said it was migrating its procurement systems to a cloud computing environment, in a bid to improve processes internally and across its supply chain. The system would help it improve procurement control, visibility and compliance, Weetabix said.

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The company also dramatically improved its warehouse management in recent years, with new software taking data from RFID tags to track goods, as well as delegating tasks to pickers according to where they are in the warehouse, avoiding forklifts being unused for long periods of time. Stock tracking and picking errors were cut from 10 percent to 0.1 percent.

Bright Food said it was “committed” to driving growth in the Weetabix business, with a strong focus on China. It also plans to draw on its existing manufacturing and distribution systems, areas in which it said it has “extensive experience”.

Zongnan Wang, chairman at Bright Food, said: “With its best in class production standards and excellent track record for innovation, [Weetabix] is poised to achieve strong and sustainable long term revenue and profit growth."

Bright Food’s profits last year were $1.2 billion (£742 million), on the back of $12.2 billion revenues. The company had not provided more detailed comment on its systems plans at the time of writing.