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Expansion of Live Hog Production Bases Drive Intense Competition in China

by 5m Editor
21 June 2004, at 12:00am

CHINA - In line with its plan to open 180 fresh meat retail stores in Shanghai during the year 2004, China's Jinluo Meat Products Company Limited has up to date established more than 100 stores in the city.

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By 2005, Jinluo aims to open up to 300 fresh meat retail stores in Shanghai city. By establishing a brand name for its meat products through the concept of chain stores, Jinluo's mode of operations has proven to be successful in meat products retailing.

Jinluo has reportedly injected RMB500 million into establishing a large-scale and modernized pork product-processing base in Dezhou, Shandong province, which is expected to process about 10,000 heads of live hogs daily.

A re-look at the landmark moves by China's Shineway Group in 2004: On March 30, 2004, the Group announced that it would be investing RMB250 million to build a meat-processing base, the largest in western China, in Banan district of Chongqing.

On April 15, 2004, Shineway Group officially collaborated with Wen's Group in Guangdong province to jointly invest RMB300 million to establish a meat-processing base in Qingyuan, Guangdong province.

On May 9, 2004, Shineway Group invested RMB1 billion in Wuhan area, Hubei province, for the initial building of a meat processing enterprise, which will process 2 million heads of live hogs and produce 15,000 tons of meat products per annum. At the same time, it will also develop businesses such as commercial chains as well as commodity distribution and delivery.

By tapping on ample joint capital to gain foothold in local live hog production bases and markets, China's meat-processing enterprises are taking competitive actions for a stake in the markets. From the perspective of enterprise development, such is an opportunity for restructuring and expansion of the industrial chain for meat production and retailing meat products. In this process of enterprise innovation, the core of the competition is shifted from the product to service itself. China's meat-processing enterprises are increasingly not looked upon as just in a processing industry.

Leveraging on the business model of chain stores and its core advantages of access to resources, quality products, as well as management and marketing, Jinluo Meat Products Co., Ltd targets at marketing meat products with its brand name in the large and medium cities of China, in a bid to capture more markets and strengthen its competitiveness.

Market experts forecast that the future development of China's meat retailing industry will be characterized by large-group co-operations, which could help establish far-reaching brand names of meat across China.

Jiluo Meat Products Company Limited is an integrated meat processing company with 2002 sales revenue amounted to more than RMB5 billion. The company processes about 6 million heads of live hogs, 15 million birds of broilers, and produces more than 600, 000 tons of meat products per annum.

With total asset at RMB 4.89 billion, Shineway Group is also a large enterprise in China with its core business in various types of meat processing. The Group processes more than 8 million heads of pigs and produces 600, 000 tons and above of processed meat products annually.

Source: eFeedLink - 21st June 2004

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