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Zhongpin to Open New Pork Plant in Eastern China

by 5m Editor
14 June 2010, at 10:05am

CHINA - Zhongpin is to mstart work on a new processing plant and a distribution centre to produce chilled and frozen pork and prepared pork products and to broaden its cold-chain logistics business in the city of Jiangyan, Jiangsu province, in August.

Mr Xianfu Zhu, Chairman and Chief Executive Officer of Zhongpin, said, "This will be Zhongpin's first production and logistics entry into the eastern China market, where we expect to create additional returns on investment for our shareholders.

"This eastern region, which includes the Yangtze River Delta with Shanghai as the center, has a large population and huge consumption potential. The Jiangyan region, in particular, is a rich and fertile growing area with abundant hogs, vegetables, fruits, and other high-quality agricultural products, and is the perfect location where we can produce our food products to serve eastern China.

"Zhongpin now has a high brand awareness in the eastern China market. We currently distribute to this market from our plants in Henan province in central China, using our high-reliability cold chain logistics system, so we have a firm foundation in the eastern China market. The newly built plant will save on our delivery costs, quicken our response to the market, further enhance customer awareness of our brand, and is expected to increase our profitability in the eastern China.

"As we have successfully done in our other market expansions, we will increase our production that is focused on middle and upper income customers, produce high-quality and safe food products, and serve several market segments. We should capture a substantial share of the market in eastern China, which will help increase our sales, profits, and returns on investment."

Construction will begin in August 2010 in two phases, with the production lines mainly for chilled pork and frozen pork and the related cold-chain logistics system to be completed in the first phase in the third quarter of 2011. The second phase, with the production lines mainly for prepared pork products, is expected to be completed in the first quarter 2012. The plant will occupy an area of 220 Chinese mu (about 36 acres). Zhongpin will invest about $63 million in the new plant, including the land use rights. About 60 per cent of the plant's advanced equipment will be sourced globally. Zhongpin installs the world's most advanced production processes, quality assurance systems, integrated information technology systems, and cold-chain logistics in its plants and distribution systems to ensure the highest quality and safety of its products.

The plant's annual capacity will be about 130,000 metric tons, with chilled pork, including easy-to-cook pork, accounting for about 80,000 metric tons, frozen pork for about 20,000 metric tons, and prepared pork products for about 30,000 metric tons.

The new subsidiary company, named Taizhou Zhongpin Food Co., Ltd., will have an initial registered capital of $7.3 million. The new plant will be located in the Jiangyan Economic Development Zone of Jiangsu province.