Unilever splashes out on China water business

Unilever, the maker of Ben & Jerry’s ice cream, Signal toothpaste and Lipton tea, has made its biggest acquisition in China for more than a decade with the purchase of a majority stake in Qinyuan Group, a water purification business.

The Anglo-Dutch consumer goods company said the acquisition would more than double the size of its water purification business, which has been based on its Pureit home purifier.

The company did not disclose the price nor the size of its stake but Qinyuan, founded in 1998, had sales last year of €140m. Unilever last hit the acquisition trail in China in 1999 when it bought ice cream maker Mountain Cream.

Paul Polman, chief executive, said Qinyuan, which uses a different purification technology from Pureit, “will bring together complementary technology from Pureit and Qinyuan and leverage Qinyuan’s local marketing insight, manufacturing and distribution strength”.

Water purification is a relatively small and fragmented market in China.

Under Mr Polman, Unilever is withdrawing from low-growth food businesses in mature markets in favour of greater exposure to emerging markets, as well as putting the accent on healthier products.

It has sold Peperami meat snacks, Skippy peanut butter and Wish-Bone salad dressings. Its Ragú pasta sauce brand is up for sale for $1.5bn, and potential buyers include US food groups Hormel, Pinnacle, McCormick and Heinz.

Unilever aims to double the size of its business while reducing negative environmental effects. Its sustainability plan includes targets for reducing greenhouse gas emissions, water and waste. It also includes producing safe and affordable drinking water.

The company’s annual report published last week showed that Mr Polman had collected a bonus in large part for his sustainability work.