LONDON, ENGLAND — Associated British Foods PLC has reached an agreement with Wilmar International Ltd.’s subsidiary Yihai Kerry Arawana Holdings Co., Ltd. to form a joint venture in China for the manufacture, sale and distribution of yeast and bakery ingredients. Financial terms of the transaction were not disclosed.

According to the companies, the joint venture will be based in Shanghai and will acquire existing Chinese yeast and bakery ingredients activities of AB Mauri, a division of ABF, and will leverage Yihai Kerry Arawana’s supply chain, sales and distribution network and local market expertise in China. Additionally, the joint venture will build and operate a new yeast plant co-located with Wilmar’s food processing plant in the Taha industrial zone in Qiqihar City, China.

The companies said the joint venture will have “cost competitive production,” and will be well positioned to capture growth in both traditional Chinese bakery products and western-style baked products.

“This joint venture is a great opportunity to build on the foundation of our yeast and bakery ingredients business in China,” said Cathal Duffy, chief executive officer of AB Mauri. “The joint venture will leverage AB Mauri’s baking know-how and technology with Yihai Kerry Arawana’s extensive route to market, local management expertise and its complementary portfolio of products. We are looking forward to working with Yihai Kerry Arawana on the shared vision of building a successful bakery business together.”