August 2, 2007

 

Tyson to come to China next year, seeking to buy or partner Chinese company

 

 

Tyson Foods Inc, the second largest chicken processor in the US, said it is making a foray into China to capitalize on rising meat prices.

 

The company aims to start producing and selling poultry in China next year, according to James Rice, Greater China country manager of the company.

 

The company may either partner with a leading Chinese poultry company, buy the company, or go it alone, Rice said.

 

Chinese consumers want trustworthy brands and safe food, which is exactly what Tyson is all about, Rice said.

 

Meat consumption is rising in China due to higher purchasing power from the population. The country is the largest pork consumer by volume and has seen increased imports from producers such as Tyson in recent years.

 

In fact, the company now supplies 18 percent of China's chicken imports, Rice said.

 

Growing consumption, along with a pork shortage and concerns over food safety recently, makes it a perfect time for Tyson to enter the Chinese market.

 

In fact, there is much room for consumption to grow: China's per capita meat consumption is at 10 kilogrammes currently. A typical consumer in Hong Kong eats four times as much.

 

Although China imposed bans on two Tyson factories in the US recently due to salmonella found in shipments, Rice said it has not affected exports to China as production was shifted to the company's other plants in the US. 

 

In the first five months of 2007, US meat exports to China rose 45 percent to 96.36 million pounds, according to USDA figures.

 

China's pork shortage currently provides a good platform for Tyson to launch its business into the country.

 

Until recently, pork prices in China were too low to make importing the meat profitable.

 

However, pork prices have risen 75 percent in a year and the meat is expected to remain in shortage for "a fairly long time". While expert opinions differ on how long that timeframe may be, Rice expects demand to outstrip supply for the next two years as the industry struggles to recover from disease outbreaks.