August 8, 2014

China - Update on recent industry developments (week ended August 8, 2014)



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      Muyuan and Longda increase investment in joint venture
          Bright Dairy increases investment in subsidiary Bright Holstan
          CHG partners Australia's UDP to develop high-quality
          Truein Group strengthens technological cooperation with
New Hope Group and Wuliangye Group cooperate on DDGS project   Aohua to build meat goat production base in Hubei  




Muyuan and Longda increase investment in joint venture 

Muyuan Foodstuff Co., Ltd. (Muyuan) and Shangdong Longda Meat Foodstuff Co., Ltd. (Longda) plan to increase investment in their joint venture - Henan Longda Muyuan Meat Products Limited Company.
Muyuan will invest additional RMB16 million (US$2.60 million) in the venture, while Longda will make a further investment of RMB24 million (US$3.90 million). After the increase in investment, the shares of the joint venture owned by the two companies will remain unchanged.
Muyuan, one of the shareholder with a 40% stake, said that the increase of investment will help the joint venture promote the development of hog slaughtering business, increase its sales revenue and boots its competitiveness on the market.


Bright Dairy increases investment in subsidiary Bright Holstan  

Bright Dairy & Food Co., Ltd. (Bright Dairy) plans to increase investment in its wholly-owned subsidiary Shanghai Bright Holstan Co., Ltd. (Bright Holstan) through the form of equity investment.
Bright Dairy will transfer the 100% shares of Wuhan Bright Ecological Demonstration Dairy Farm, 100% shares of Dezhou Bright Ecological Demonstration Dairy Farm, 100% shares of Fuyu Bright Ecological Demonstration Dairy Farm and 51% shares of Shanghai Dairy Cattle Breeding Centre to Bright Holstan. The combined value of the shares is worth RMB256.84 million (US$41.48 million).
Bright Holstan had a registered capital of RMB200 million (US$32.30 million). After the increase of investment, the company will have a registered capital of RMB456.84 million (US$73.77 million).

CHG partners Australia's UDP to develop high-quality 

Shanghai Chenguan Dairy Co., Ltd. (CHG) has signed a strategic cooperation agreement with Australia's dairy giant United Dairy Power (UDP) for the development of infant formula.
CHG says that the company will tap into UPD's rich and high-quality milk resources to develop safe, healthy infant formula for the Chinese market. Through the cooperation with UDP, CHG will further consolidate its milk sources and enrich its product offering.
As the largest private dairy company in Australia, UDP is a premium supplier of fresh milk and dairy products. The company owns vast swath of pastures and a number of dairy farms, as well as four dairy processing plants in Australia. 
Headquartered in Shanghai, CHG is one of the leading dairy brands in China. This year, the company has won the title of nationally recommended brand and passed inspection under the new safety standards for infant formula. 


Truein Group strengthens technological cooperation with   

Zhejiang Dongyang Dongyuan Food Co., Ltd. (Dongyuan Food), a subsidiary of Truein Group, has signed a memorandum with Italy's Travaglini S.p.A. to enhance the technilogical cooperation between the two companies.
According to the memorandum, Travaglini will help Truein Group improve its meat production technology and enhance the food safety of its food products.  
In June this year, the two companies already reached a strategic cooperation agreement. Truein Group agreed to buy Travaglini's equipment for the production of fermented ham through its subsidiary Dongyuan Food, while Travaglini will transfer the know-how, technology and provide technical support to Truein Group.  
Truein Group says the strategic cooperation with Travaglini will help the group explore the Chinese market of fermented ham and other meat products, and improve its profitability. It will also help the group make use of its own black hog production, extend the industrial chain and enhance the product portfolio.  
Founded in 1950 in Milan, Travaglini is a renowned manufacturer of meat processing equipment. The company has become a leader in meat, dairy and fish product processing in Italy and is involved in over 4,000 projects around the world. 



Aohua to build meat goat production base in Hubei  

Hubei Aohua Green Food Co., Ltd. has signed an agreement with 11 owners of Yunxi county's goat farms to develop a meat goat production base. 
In the next three years, Aohua will build a 1,000-head demonstration farm for a local herd "horse-head goats" and set up three cooperative farms, which will collectively produce 10,000 commercial meat goats per year. The company also plans to build a goat processing plant with a capacity of 50,000 head per year.
The project is expected to cost an investment of RMB10 million (US$1.62 million). When fully operational, the goat production base is expected to generate an annual output value of RMB50 million (US$8.10 million) and taxes of RMB10 million (US$1.62 million).




New Hope Group and Wuliangye Group cooperate on DDGS project   

New Hope Group and Wuliangye Group have signed an agreement to jointly develop a DDGS project in Sichuan.
The investment in the project is estimated to total RMB772.8 million (US$124.80 million). According to the agreement, Wuliangye Group will provide the raw material distillers grains, while New Hope Group will be responsible for the research and development of the Dried Distillers Grains with Solubles (DDGS) for ruminant.
The two companies will set up a joint venture – Sichuan Jinwuxin Feed Technology Co., Ltd to manage the project. Wuliangye Group and New Hope Group will each take a 35% stake in the joint venture, while the third investor, Yibin Feiyan Investment Co., Ltd., will own the remaining 30% stake. 
The companies have started the first phase of the project, which includes the construction of a feed processing plant at Wuliangye Group's industrial park.


* 1 hectare (10,000 sq. meters) =15 Mu
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