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Shuanghui Beefs up with Overall Industry Chain

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Shuanghui Group, China's largest meat company, said the overall industry chain will help it achieve ambitious sales goals and promote brand value. "I believe that we will achieve annual sales of 100 billion yuan (US$14.98 billion) within five years and become the most valuable meat brand in the world. And industrialization can guarantee the high quality of our food and help avoid risks," Wan Long, chairman of the board at Shuanghui Group, told China Daily.

Early this month, the group injected almost all businesses into its listed company - Shuanghui Development Co, making it the world's most valuable meat company stock, with a market value of more than 100 billion yuan.

The industry chain will make its products traceable. The company will know the origin and health condition of the hogs it uses as well as the destination of processed products, Wan said.

Shuanghui's competitors Smithfield and Tyson are either engaged in the slaughtering or meat-processing sides of the business, he said, but not the whole chain, bringing them risks caused by fluctuating prices and supplies of materials.

Shuanghui spent more than 4 billion yuan on acquiring slaughterhouses, expanding its annual capacity to 2 million head. When a slaughterhouse was set up, they also opened processing plants to make full use of the meat. The Luohe, Henan-based company will invest 20 billion yuan during the 12th Five-Year Plan (2011-2015) to double its production to 6 million tons. Because the top 10 Chinese companies make up less than 10 percent of the domestic market, Shuanghui's supply will not exceed demand, Wan said.

According to China International Capital Corporation, China's slaughtering and meat-processing industries are decentralized.

There are only 3,696 modern enterprises in China, accounting for 18 percent of the market, while the other 82 percent is served by slaughterhouses with manual and semi-mechanized operations.

(China Daily December 21, 2010)

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