… China Xiangtai Food Co., Ltd. has unveiled ambitious plans… “We intend to open our own supermarkets in Chong Qing, and nearby areas, as well as sell more variety of products such as smoked pork. We will start regional first, then nationwide”… They are in talks with Tyson Foods, one of the largest food companies in the US, for potential collaboration…
US-listed Chinese pork processor reveals supermarket plans to help bolster growth ambitions
By Guan Yu Lim, Food Navigator Asia
Pork processing company China Xiangtai Food Co., Ltd. has unveiled ambitious plans to launch its own supermarkets to sell its branded chilled and frozen products.
The company’s president, Xiaohui Wu, told FoodNavigator-Asia: “We intend to open our own supermarkets in Chong Qing, and nearby areas, as well as sell more variety of products such as smoked pork. We will start regional first, then nationwide.”
The company’s brand is called Penglin Xiansheng, and the firm operates its own slaughterhouse as well as production factory.
Hogs are slaughtered, packed, and delivered to local distributors who resell to smaller wholesalers and retail vendors. Other fresh products include pork byproducts, beef, lamb, and rabbit meat.
The company also manufactures shredded, pickled and processed goods.
Consumer habits ...
The company’s net revenue in the fiscal year ending June 30, 2018 was US$101 million, a 60% increase from 2017 (US$63 million).
According to Wu, most of the revenue (80%) was contributed by slaughterhouse, while 15% was products from the factory.
He said that the African swine fever outbreak had affected business, as well as the whole pork industry.
The company does not anticipate strong revenue growth this year as “we have to set aside additional costs to comply with the strict measures from the government.”
To help their expansion plans, their priority is to increase revenue by having full capacity production and merging with smaller slaughterhouses.
Their second priority is to increase net profit rate.
“Right now, profit rate for the company is around 4%. The average rate for the pork industry should be 6 to 8%. We want to increase the net profit rate next year.”
“We aim to achieve that by getting more funds and capital, whether it’s from equity or bank loans,” he said.
Wu said being publicly listed on the US market also meant greater opportunities.
“When the African swine fever outbreak happened in China last August, it killed millions of pigs and affected pork supply.
“We had to import frozen pork from the US to keep up with the demand.”
They are in talks with Tyson Foods, one of the largest food companies in the US, for potential collaboration.
A bacon of hope
Wu said due to the culling of pigs, supply was insufficient and unstable, causing prices to rise...
China Pork Op to Launch Supermarket