May 18 2007

Yurun sets up 3-million-head slaughter capacity plant in China's Yunnan

Giant hog processor Yurun Group has signed an agreement with the local government of Xuanwei City in southern Yunnan province to set up a 3-million-head per year slaughter plant.

Besides hogs, the plant would also be producing 30,000 tonnes of ham a year. The plant, which would take 5 years to build, is expected to cost an estimated RMB 600 million to RMB 800 million (US$78.2 million to US$104.3 million), and is expected to yield revenues of RMB 3 billion to RMB 3.5 billion (US$391 million-US$456 million) per year.

In recent years, Xuanwei City has been restructuring its farming industry and encouraging the industrialization of modern agricultural farming methods with an aim towards expanding its hog raising industry. Xuanwei's hog industry was worth RMB 1.38 billion last year, the top in Yunnan province.

Yurun Group, based in Jiangsu, is now a 10-milion hog slaughter capacity processor with revenue at more than RMB 12 billion. Through the latest development, both Xuanwei City and Yurun hopes to leverage each other's strengths to mutually develop the pork industry profitably. 

Raising capital from issuing shares and bank loans, Yurun has been on an aggressive expansion path this year, setting up slaughter plants in the provinces of Heilongjiang, Guizhou, Jiangsu and Hunan.

Yurun aims to triple pig slaughtering capacity to 30 million heads a year by 2010 from the current 10 million heads. In the food and meat processing business, Yurun Foods also intends to double production capacity from 168,000 tonnes to 400,000 tonnes.

Yurun has also expanded in the north-eastern part of China. The company operates five modern abattoirs there and has plans of doubling its plants in this region in order to cater to neighbouring export markets like Russia, Japan and South Korea.