November 11, 2011

Zhongpin Q3 net income increases 25%

For the third quarter ending September 30, 2011, compared to the third quarter in 2010, net income for Zhongpin rose 25% to US$18.3million from US$14.7million.

Revenues climbed 65% to US$398.1million from US$241.1million.

Total tonnage of pork and other products sold was up 6.8%, with average prices up 54.6%.

The China-based meat and food processing company specialises in pork products, vegetables and fruits.

The company's construction projects are reportedly on schedule, with three coming into operation in the fourth quarter. Zhongpin began operating its phase two facility in Tianjin in September. Phase two has a production capacity of 36,000 tonnes for prepared pork products. Phase one began operating in January 2010 with a production capacity of 100,000 tonnes for chilled and frozen pork.

Zhongpin is also investing about US$61.5million to build a slaughter and processing plant, low-temperature prepared pork plant, logistics centre, and research and development centre, in Nong'an County, Changchun, Jilin. The company expects to begin operating the chilled and frozen pork facility in the fourth quarter of 2011 and the prepared pork products facility in the third quarter of 2012.

Approximately US$63.0million is being spent to build a production facility, warehouse, and distribution centre in Taizhou, Jiangsu. This facility will have a production capacity of about 80,000 tonnes for chilled and frozen pork, including easy-to-cook products, 20,000 tonnes for frozen pork and 30,000 tonnes for prepared pork products. Construction began in September 2010. The chilled and frozen pork facility will begin operations in the fourth quarter this year, and the new facility for prepared pork products in the third quarter of 2012.

Zhongpin is investing approximately US$58.5million to build a new production, research and development and training complex in Changge, Henan. Upon completion, this new facility will have a production capacity of about 100,000 tonnes for prepared pork products. Adjacent to this new facility, the company expects to develop a centre for research and development, training, and quality assurance and control.

Construction for the first phase with an annual production capacity of about 50,000 tonnes for prepared pork products began in the first quarter of 2011 and should be completed by the fourth quarter of 2011. The second phase, with a production capacity of about 50,000 tonnes for prepared pork products, should be completed by the fourth quarter of 2012. Zhongpin plans to open the research and development and training centre by the fourth quarter of 2012.

The company is investing approximately US$18.0million in a cold-chain logistics distribution centre in Anyang, Henan. It also plans to spend approximately US$87.5million in a chilled and frozen food processing and distribution centre in Kunshan, Jiangsu, near Shanghai.