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Significant Growth for DaChan's Food Business

by 5m Editor
8 September 2011, at 9:58a.m.

CHINA - DaChan Food (Asia) Limited, one of the largest chicken meat products and feeds suppliers in China, saw its processed food business deliver a remarkable performance during the first six months of the year, as sales surged 35.8 per cent year on year.

The Group’s sales reached $4.64 million while gross margin was up 27.1 per cent according to the interim results for the six months ended 30 June 2010.

The Group had a turnover of $660 million for the six month ended 30 June 2010, up 17.9 per cent from last year.

Turnover of the chicken meat segment amounted to over $330 million, representing a growth of 19.7 per cent over the last corresponding period. The feeds to external customers segment recorded a turnover of over $270 million, up 12.9 per cent from last year.

Turnover of the processed foods segment continued to grow as a share of the Group’s total revenue, reaching a record 8.3 per cent during the period, thanks to an enhanced product mix, broader sales channels and impressive performance by the branded business.

DaChan Food continued to take advantage of its strong “Sisters’ Kitchen” brand to help drive business growth.

Good progress was made in the Group’s efforts to lift brand recognition, leveraging its proprietary product tracing program which has been well received by the market.

During the period, the Group continued to expand its branded business in China, and successfully penetrated new markets such as Wuhan, Chengdu, Shandong, Xiamen and Heilongjiang. The Group also expanded its distribution channels in tier one cities.

As of the end of July 2010, the Group has successfully placed its “Sisters’ Kitchen” products on the shelves of 115 supermarkets in Beijing, Tianjin and Nanjing. In addition, the Group has also been able to raise the profile of its "Sisters’ Kitchen" deli stores to increase their sales volume.

Mr. Mark Han, Chairman of DaChan Food, said: "The Group was confronted with unfavorable operating conditions in the first half of 2010 as a result of higher raw material costs and lower average selling prices.

"Despite this, DaChan Food managed to maintain its leading position as a high-quality chicken meat product supplier, thanks to its diversified distribution network, optimised product mix and solid operating platform. We expect the operating environment of the chicken meat and feeds to external customer businesses to continue to improve in the second half of 2010.

"We have already seen a strengthening of demand for our products and an improvement in selling prices. That is why we are cautiously optimistic about delivering growth across various businesses in the second half of this year."

China’s chicken meat market is expected to continue to grow as the income levels of consumers increase and the economic stimulus measures implemented by the Central government continue to fuel domestic consumption.

DaChan Food is poised to take advantage of the growth opportunities to drive its development. The Group will continue to invest to expand production capacity and market share, providing consumers with safer and healthier chicken meat products.