New Hope eyes overseas buys
New Hope Liuhe, a listedcompany of China’s largest feed-grain producer New Hope Group, said it will consider more overseas acquisition possibilities to feed the country’s growing appetite for meat.
“We will l ook i nto the possibilities of mergers and acquisitions abroad. This is not only to satisfy domestic demand but also part of the company’s strategy to have global presence,” Deng Cheng, vice-president of New Hope Liuhe Co Ltd, told China Daily.
He said the targets must have good natural resources, a safe investment environment and cost advantages in terms of production, adding that countries i n Central Europe such as Poland have very good conditions.
As a major meat producer, New Hope Liuhe plans to increase its capacity, especially in poultry, in the next few years as the Chinese people include more meat in their daily diet. It also has some of the country’s leading beef, dairy, pork and poultry brands.
The company plans to invest about 8.8 billion yuan ($1.3 billion) for pig breeds, Deng said.
Liu Yonghao, the billionaire chairman of New Hope, Meat imports jump 80% in first half
China’s meat imports surged nearly 80 percent in the first half of this year, as the Chinese people shift to a more meat-rich diet, officials told China Daily on Wednesday.
Meat imports stood at 2.1 million metric tons in the world’s second-largest economy, with more of the imports coming as beef and pork, compared to a year ago, said Li Shuilong, executive president of the China Meat Association.
The association forecasts that demand for meat in China will reach as much as 10 million tons by 2020, accounting for half of the global trade in meat.
“As China’s economy has grown, the diet of many Chinese people has changed. Demand for beef and pork has never been stronger, and domestic supply is simply unable to keep pace,” he said during the China International Meat Industry Week 2016 held in Beijing.
Brazil has overtaken Australia as the largest beef exporter to China, according to the association.
Jiang Hua, founder and chief executive officer of 91haorou.com, an online trading platform for meat, said that imports from countries such as Brazil, Australia and even the United States, from which China lifted its import ban earlier this month, will continue to have a negative impact on domestic players.
“The fierce competition has just started with so many brands available in the market. I think small meat producers are likely to be either driven out of the market or merged with other strong and big companies in the next few years, and companies will have to focus on safety, quality and branding to guarantee a slice of the market,” he said. We will look into the possibilities of M&As abroad.” Deng Cheng, vice-president of New Hope Liuhe Co Ltd
said in April that the group will invest up to 10 billion yuan in the next three to five years on high-end animal protein and food-related assets overseas.
The privately-owned company in Sichuan prov- ince is also seeking to acquire livestock-breeding companies overseas, he said, citing a lack of such capabilities in China and increasing domestic demand for beef, lamb and seafood.
A changing diet coupled with a massive boost for the meat industry has pushed more Chinese companies into traditional meat-producing regions such as Australia and New Zealand, where meat industry has been driven largely by Chinese consumers.
This month, the authorities in New Zealand finally gave the go-ahead for Silver Fern Farms, the country’s biggest meat cooperative, to sell a half stake to a Chinese pig processor Shanghai Maling after long negotiations.
The deal, valued at NZ$261 million ($191 million), will be able to pay off SFF’s debt and its upgrades of plants and operations.
It will also help the New Zealand company to gain access to thousands of retail outlets, as Shanghai Maling has direct control of 800 supermarkets and stores.