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last update:Jul 18, 2008
Ng Fung Hong signs joint venture pig farm
China Resources Enterprise, Limited (CREL) has
announced that its wholly-owned subsidiary, Ng Fung Hong Limited has entered
into an agreement with Henan Cereals, Oils & Foodstuffs Import & Export
Group (HNCOF) to set up a new joint venture company in Henan
Province.
Under the agreement, Ng Fung Hong will contribute RMB245 million (US$36
million) in cash for a 70% stake in the new venture, while HNCOF will make an
asset injection of, among other things, all its existing pig farming, feed
processing and livestock trading businesses for the remaining 30% stake.
Immediately after the establishment, the joint venture will have an annual
production capacity of 190,000 head of live pigs.
Intensive pig
farming
HNCOF is a state-owned enterprise and is the largest
intensive pig farming corporation in Henan Province, the second largest pig
rearing province of the mainland. HNCOF has been engaged in the livestock
production business for over 40 years and currently has an annual export quota
for supplying 210,000 head of live pigs, representing nearly one-seventh of the
total export quotas, and about 5,000 head of live cattle to Hong Kong. It also
distributes high quality live pigs and pork in the mainland under the brand name
“Yumingâ€.
Through the majority stake in the joint venture and drawing on
the expertise of HNCOF in raising livestock and its export quotas, Ng Fung Hong
can secure a stable and reliable source of high quality livestock for supply to
the Hong Kong market and its operation in the mainland, thereby enhancing its
competitive edge amidst soaring prices of live pigs.
Large-scale
Mr. Mark Chen, Managing Director of
China Resources Enterprise, Limited said, “The development of large-scale hog
farming will be the future trend in the mainland as it can enhance economic
benefits as well as the quality of livestock products, hence we are expanding
into the upstream pig farming segment.
“We are confident that with the
profound experience of our joint venture partner, this project will
significantly strengthen our operation in livestock supply to Hong Kong, while
at the same time taking us one step further to becoming a leading vertically
integrated meat supplier in the mainland.â€
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