November 17, 2006
Chinese meat processor expands aggressively in third quarter
Zhongpin Inc., a leading Chinese meat and food processing company, has reported third quarter revenue up by 86 percent on-year to a record US$33.8 million as the company continues expanding.
The company increased its retail outlets to more than 2,480 during the quarter, with 72 new Zhongpin branded stores, 106 new supermarket counters and 9 new showcase stores.
Gross profit increased by 78.5 percent to US$5.2 million over the third quarter in 2005.
Revenue for the first nine months of 2006 increased to US$96.1 million, or 87.8 percent, from US$51.2 million in the first nine months of 2005. Gross profit for the same period was US$14.5 million, up 70.1 percent from US$8.5 million in the first nine months of 2005.
The company said that revenue for the third quarter 2006 increased for the fifth consecutive quarter.
However, operating income for the quarter was US$1.7 million, falling 20.4 percent from US$2.2 million from the same period the previous year.
During the quarter, the company continued to gain market share through increased production capacity and expanded retail platform.
It also introduced 20 new products, which helped to increase sales for its higher margin processed meat segment.
The company said that revenue for the quarter was driven by increased sales of chilled pork, which represented 46.9 percent of sales, and frozen pork, which represented 35.4 percent of revenue. Both had increased 4 percent over the third quarter of 2005.
Processed meat represented 11 percent of revenue for the quarter, up from 9.5 percent of revenue in the same period a year ago.
Restaurants and non-commercial organizations represented 27.4 percent of revenue, food distributors represented 18.3 percent of revenues and exports represented the remaining of 7.8 percent of revenues.
Zhongpin's customers included 14 international and domestic fast food companies, and 1,360 school cafeterias, factory canteens, army posts and national departments.
