October 9, 2007

China's DaChan to focus on feeding and processing operations

DaChan Food (Asia) Ltd, which raised nearly HKD 900 million (US$119 million )from a recent Hong Kong listing, plans to stay focused on its upstream meat processing business, the South China Morning Post reported, citing company chairman Mark Han Jia-hwan.

Dachan Food is the Dalain-based subsidiary of Taiwan-listed Dachan Great Wall Enterprise, and was the largest chicken slaughterhouse in China in 2005. The company is also one of the top 10 feed manufacturers in China, the second largest feed supplier in Malaysia and the third largest in Vietnam.

In 2006, 56 percent of the company's revenue came from chicken production while 35 percent came from animal feeds. Before the IPO, the company said it would focus on the processed foods segment. 

The company is good at the upstream business, which is feeding and processing and should focus on its core competencies to beat competitors, the Hong Kong newspaper quoted Han as saying.

This means the company would have to invest more than its competitors, who would be diluting their resources in multiple businesses, he added.

DaChan is the first chicken meat supplier to go public in Hong Kong.