June 23, 2011

Three Japanese companies establish business in China

Japanese trader Mitsubishi Corp., Itoham Foods Inc. and Yonekyu Corp said on Wednesday (Jun 22) that they will collaborate with Chinese state-run food conglomerate COFCO Ltd. to start a meat business in the country.

The three organisations will acquire 33% of COFCO's meat operation subsidiary in July through MIY Corp., a joint investment company set up by the three Japanese firms.

The Japanese companies plan to invest a total of JPY3.3 billion (US$41 million) in COFCO's meat operation by 2017.

Through the Chinese company, the Japanese firms will engage in livestock breeding and meat processing, selling and importing.

The Japanese and Chinese partners plan to spend a total of CNY10 billion (US$ 1.55 million) by 2017 to expand their meat products and processed foods business in China.

The partners hope to raise sales from the business to CNY18.1 billion (US$2.8 billion) in 2017 from the current CNY2.3 billion (US$355.5 million).

The Japanese companies plan to make use of their country's advanced know-how, including efficient production, to meet Chinese consumers' increasing pursuit of safe meat products.