May 23, 2023

 

Live poultry market closure drives Chinese producers to prepared food sector

An eFeedLink Hot Topic

 

Following the outbreak of COVID-19, more Chinese local authorities have closed down live poultry markets, which expedited the pace of centralised slaughtering and the sales of chilled and fresh poultry products across China.

 

This development mainly affected the yellow-feather broiler market. Key players in this segment include Wen's Group, Jiangsu Lihua, Guangdong Jiangfeng and Hunan Xiangjia. These companies are investing in three areas to adapt to the change: building broiler slaughterhouses, setting up food companies and product branding and promoting.

 

Wen's Group established the Jiarun and Jiawei brand, further integrating its fresh slaughtering, sales and deep processing businesses. It aims to achieve its "532" objective by the end of 2024, which includes selling 30% of local breed chickens slaughtered under its house brand and selling 20% of its slaughtered chicken as cooked food products.

 

Lihua raised ¥1.6 billion to build slaughterhouses to handle its fresh and chilled products and 50% of its total release volume in the next five years. Additionally, it will further establish and expand its cooked food processing capacity.

 

Guangdong Jiangfeng's chilled and fresh chicken processing capacity can handle 50% of its total production, with a combined annual output of 13,000 tonnes of fresh, frozen and cooked food products. It aims to boost its slaughter volume to 11 million chickens per year.

 

In addition to integrating the farming, slaughtering and processing, and sales sectors, some companies expanded into the prepared food sector.

 

In light of that development, Chunxue Foods had, at ¥1.07 billion, completed the first phase of construction of its broiler project site. Thus, it will have facilities to slaughter 100 million broilers, produce 240,000 tonnes of chicken products and 120,000 tonnes of prepared chicken annually, and will reach main suppliers in the domestic market.

 

In March 2022, Wen's Jiawei Xianning Cooked Food Factory in central China officially began operations, with the capacity to handle seven million chickens per year. Wen's invested a total of ¥250 million for Jiawei to set up a prepared food business in south, east and central China and Guangzhou.

 

As early as May 2020, Sunner Development announced its plan to actively develop its prepared food business. It constructed 10 food processing factories with a combined production capacity of over 430,000 tonnes. Prepared meals accounted for about 30% of Sunner's total income.

 

- David Lin, eFeedLink