China's Xinchang Group benefits from higher export tax rebate rate

With China raising the export tax rebate rate for poultry products from 13 percent to 15 percent, China's Shandong Xinchang Group will be able to increase its earnings by US$600,000 which will help to lower their production cost amid the grim global economic outlook.

Shandong Xinchang Group has operations in feed processing, poultry breeding, poultry meat processing, as well as the sales and processing of cooked food products. The company's products are exported to more than 10 countries and territories including Japan, South Korea and the European Union.

However, the company faced mounting export difficulties since the fourth quarter of last year due to the worldwide financial meltdown. To date, the orders for the company's products fell 50 percent on-year and its export value dropped 30 percent compared to the same period last year.

Lee Yuting, vice-chairman of the company, said they welcomed the higher export tax rebate rate as they export more than 90 percent of their products to Japan. The company has been in a disadvantageous position with demand from Japan declining and the sharp depreciation of the Brazilian currency led the local producers to greatly lower their export prices of chickens to Japan.

Meanwhile, the export volume for the company's poultry products is gradually picking up and is likely to reach the pre-downturn level of about 1,000 tonnes per month.