Date
19 November 2017
Evergrande boss Xu Jiayin (in blue shirt) was this week touring Inner Mongolia which led to speculation he may be eyeing the dairy business. Photo: NetEase
Evergrande boss Xu Jiayin (in blue shirt) was this week touring Inner Mongolia which led to speculation he may be eyeing the dairy business. Photo: NetEase

New goal of China’s top football club investor Xu

It’s hard to think of any owner of a major football club who also sells milk powder. Evergrande’s Xu Jiayin could be the first.

From property to football to mineral water, Xu’s twists and turns on the investment path are often described as unexpected.

Earlier this week, Xu was reportedly touring Inner Mongolia—China’s dairy industry base—on his private jet.

The media immediately speculated that Xu wants to dip his finger into the dairy business and the making of infant formula. The company told media it has no immediate plans.

But few are convinced as senior executives of Evergrande were spotted inspecting dairy farms and talking to local officials previously. Some reports said the group has already set up a special unit for the new business.

Xu’s interest in the dairy business may be sparked by his buddy, Alibaba’s Jack Ma. Last June, Capital Management, a private-equity fund co-founded by Ma, invested no less than 2 billion yuan in an unlisted unit of Inner Mongolia Yili Industrial Group.

The mainland’s growing dairy market has attracted a bunch of heavyweight investors ranging from private equity firm KKR to sovereign funds such as the Government of Singapore Investment Corporation. The high-profile deals of these big names may have caught Xu’s attention too.

But if Xu is serious, he would be facing a very difficult task of convincing mainland mothers. Given the industry’s tainted milk scandals, anyone with a bit of money would rather buy imported products for their kids.

Xu has no expertise in dairy products whatsoever. But from a different perspective, maybe that doesn’t matter at all. Xu can’t play football either but he successfully led his football club to win the Asian Champions League by spending heavily on recruiting good players.

As long as Xu is willing to go for the best talents and equipment, he may have a chance to make it in the dairy world too. 

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JL

EJ Insight writer

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