July 22, 2008


China's DaChan to expand through acquisitions


China's DaChan Food aims to increase its market share in poultry meat production through acquisitions and expanding capacity.


DaChan Food chairman Han Jia-hwan said the company plans to acquire about two medium-sized poultry meat producing companies each year, with a targeted slaughter rate of 500-600 million chickens by 2015.


The company aims to process 130 million chickens this year, up 15 million from 2007. DaChan plans to acquire chicken meat production lines with an annual capacity of 20 million chickens and expand their yearly capacity to 30 million. This move, Han said, could help to expand the company while saving the costs of getting licenses.


Han expects an 8.7-percent gross profit margin this year, which would be a 0.2-percent rise from last year. Han also said he wants to expand the processed foods business, which accounted for less than 10 percent of the company's total turnover last year, through new projects in Shandong, Tianjin and northeast China.


In addition, DaChan is planning to achieve a gross profit margin of 8-11 percent and 20-25 percent in its feed and processed foods businesses respectively next year.


DaChan Food (Asia) is one of the largest poultry processors in China. The company is the exclusive sourcing agent for MacDonald's in China and supplies a third of China KFC's chickens.

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