March 4, 2008

Yurun Group to step up on acquisitions
 

China's Yurun Food Group will be stepping up acquisitions this year in order to expand capacity, according to a senior executive of the company.

Yurun is currently in talks with 20 meat-processing firms and this year's acquisitions could exceed last year's count of six, said the executive, who had requested for anonymity.

The move is to prepare for future industry consolidation, the executive added.

Yurun Group accounts for less than 2 percent of China's meat-processing market, which is worth about RMB400 billion (US$56.3 billion) but crowded with over 1,000 players.

It's too early for conclusions in such a fragmented market, although Yurun would need a lot of capital to consolidate the market, according to Bo Guanghui, an analyst at CITIC Securities Co.

Expansion could assist Yurun to secure its profit margins, which is pressurized by rising hog price in China and governmental measures of curbing food price inflation.

Yurun Group has recently acquired Wuzhou Food Company's beef processing business and is also set to invest RMB106 million (US$15 million) in a hog farm in Wangji Township, located in Siyang district of Jiangsu province.