April 19, 2007

China's Tongwei opens first foreign subsidiary in Vietnam

Tongwei's Vietnam subsidiary Yuehua Aquaculture Feeds Co. Ltd opened in the presence of hundreds of Vietamese feed traders and fish farmers Tuesday Apr 17, with the company's director Liu Hanyuan presiding over the ceremony.

Covering an area of 40,000 square meters, Yue Hua Aquaculture Feed Co. Ltd is located in the central province of Quang Nam. The company is a joint venture between Tongwei and Guangdong Hengxin Group. The investment, valued at US$5 million, is Tongwei's first foreign subsidiary.

Huang Qigang, a spokesman of Tongwei, said the company has been exporting thousands of tonnes of aquafeed to Vietnam in recent years.  Besides Yuehua, Tongwei plans to launch three more manufacturing companies in Vietnam, each with investments exceeding US$ 5 million.

Trade between China's Sichuan province and Vietnam has been growing at rates above 40 percent for the last several years. As more companies from Sichuan launch their projects in Vietnam, Sichuan has become the top province in China investing in the country.

Before Tongwei, another China feed giant, New Hope Group, chose Vietnam as the first stop in its path to international expansion as well. New Hope opened its first factory in Ho Chi Minh City in 1998.

Tongwei is one of China's largest feed producers, selling nearly 1.2 million tonnes of feed in 2004. Nearly half the amount sold was aqua feeds while pig feed took up 222,000 tonnes and chicken feed was 127,000 tonnes. The company had revenues of RMB$2.6 billion (US$336.9 million) in 2004 with net profits of RMB 69.7 million (US $9 million).