By Joseph Chaney
HONG KONG (Reuters) - China Yurun Food Group (1068.HK: Quote, Profile, Research, Stock Buzz), a leading Chinese meat processor, will seal three acquisitions by end-2007, building capacity and protecting profit margins despite rising hog prices and global concerns about the safety of Chinese-made food.
Yurun -- which translates roughly as "raining wealth and health" -- should be able to pass soaring pork prices on to end customers, Chairman Zhu Yicai, China's 24th-richest businessman according to Forbes in 2006, told Reuters on Thursday.
And Zhu said global perceptions about the hazards of Chinese products, after a series of scandals, were misplaced.
"I haven't read the international media reports on this issue," said the 43-year-old, who founded the group in 1993.
"The overall quality of Chinese products is good. But China is a developing country, and it's good that attention is being paid to this issue because it will pressure firms to improve."
Yurun will mostly acquire firms in the slaughtering sector, but Zhu did not disclose any price tags.
The pork processor vies with Henan Shuanghui Investment & Development Co. 000895.SZ and People's Food Holdings Ltd. (PPFH.SI: Quote, Profile, Research, Stock Buzz) to sell everything from frozen pork to processed meats such as ham, bacon and sausages to an increasingly wealthy and meat-consuming populace.
But Yurun is facing cost pressures as hog prices have risen after a blue-ear disease epidemic. Hog prices have climbed to 13-14 yuan per kg from 12 yuan per kg in May, Nomura says. Continued...
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