Ng Fung Hong signs joint venture pig farm

17-07-2008 | |
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 “Yuming”.

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.

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.”

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