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Poultry Companies Belong to New Chinese Food Giant

by 5m Editor
18 May 2009, at 8:12am

CHINA - Beijing Sanyuan Group has formed a new company from a milk supplier and two poultry product manufacturers, with assets totalling 15 billion yuan (RMB).

Beijing Capital Agriculture Group, which is centered on the city's major milk supplier Sanyuan Group and two poultry product makers, opened for business in the city on 16 May, say official sources.

Sanyuan has absorbed the asset of Huadu Group and will manage the operation of Beijing Dafa Chia Tai Co., the other party in the regrouping, Xue Gang, general manager of the new company, told a press conference to mark the event. He served as chief manager of Sanyuan.

Total assets of the new company reaches RMB 15 billion ($2.2 billion) with the employee total nearly doubled to 40,000. The dairy group alone has a company asset of RMB 10 billion.

Sanyuan will serve as the listed company of the new agriculture group, according to the deal.

The regrouping would help enhance the company's capacity in fields such as poultry production, food processing, and bio-medicine development, according to Mr Xue.

Group president, Zhang Fuping, said the new company will make full use of the capital market and seek more ways to raise capital.

In March, Sanyuan acquired the core asset of Sanlu Group at RMB 616.5 million, which went bankrupt as a result of the baby milk scandal that left six children dead and some 300,000 more sick. It later gained 95 per cent of the shares in Sanlu's company in Shandong Province for RMB 49 million.

Sanyuan was one of the few large dairy producers whose products had been tested as being clear of melamine contamination.

"One of our major task at this stage is business restructuring. We will not rule out the possibility of purchasing other assets," Mr Zhang said.

Huadu and Dafa – the other two parties of the new company – are two major domestic chicken product suppliers.