China's Sanyuan acquires two poultry product companies
Beijing Sanyuan Group, the parent company of Sanyuan Food, has acquired two Beijing poultry product companies, signalling a move by Sanyuan to diversify its business and strengthen its competitiveness.
Under the agreement signed by the three parties, Beijing Sanyuan Group will obtain the assets of Beijing Huadu Foodstuff, a leading chicken chain in Beijing, for free, while it will manage the business of Beijing Dafa Group, a top 50 leading chicken chain nationwide.
The new entity, which is being renamed as Beijing Capital Agricultural Group, will own assets worth RMB15 billion and generate annual sales revenue of RMB10 billion. The Group will cover a wide scope of businesses ranging from breeding and processing of poultry to dairy food processing, bio-pharmaceuticals and logistics.
Xue Gang, general manager of Beijing Capital Agricultural Group, said the new company has plans to be the leading agricultural group in China.
Meanwhile, the corporate restructuring will eliminate the competition between Huadu and Dafa, and transform the new group into a strong livestock chain, according to Yin Yanxun, chairman of Beijing Dafa Group.
When the integration of the two companies is complete, the new group will produce about 200,000 tonnes of chicken products annually and export 30,000 tonnes of prepared food every year.
Sanyuan Food is one of the few dairy firms that emerged intact from last year's contaminated milk scandal. The country's leading dairy companies such as Mengniu and Yili chalked up huge losses for 2008 while Sanyuan achieved an on-year increase of 87.2 percent in profits, amounting to RMB40.75 million.
In early March, Sanyuan bought the core assets of bankrupt milk producer Sanlu for RMB616.5 million.
However, in comparison with its competitors, Sanyuan is still smaller in scale as it posted a first quarter profit of RMB32.32 million while Yili achieved RMB113 million of profit in the same period.
US$1=RMB6.825 (May 19)
