COFCO Meat, a leading integrated pork company with a focus on providing safe meat products to Chinese consumers, and a consortium of investors composed of KKR, Baring Private Equity Asia, HOPU, and Boyu, announced the formation of a strategic partnership. The consortium will invest in COFCO Meat alongside existing shareholders to build and manage large-scale industrialized hog farms and meat processing plants in China. Terms of the transaction were not disclosed.
COFCO Meat, a subsidiary of COFCO Group, is a modern industrialized and integrated food company engaged in hog and poultry production, processing, distribution, and meat imports and exports. Established less than five years ago, COFCO Meat is now one of the largest hog producers in China. The large-scale and integrated operations enable effective quality control to produce high-quality meat products to address increasing food safety issues in China. The company markets its fresh meat and processed meat products under the brands Joycome and Maverick.
According to the US Department of Agriculture and the China Animal Industry Yearbook, China accounts for more than 50% of global pork consumption, while large-scale farms with an annual output of 50,000 or more hogs contribute less than 1% of the total domestic supply. Large-scale farms are expected to increase more than six fold by 2020 given their food safety and quality control capability, as well as their greater operational efficiency compared with smaller farms.
Ning Gaoning, Chairman of COFCO Group, said: “Meat is the single-largest food category in China’s diet, and meeting this demand is a critical link and a natural extension of our company’s value chain. Chinese consumers demand of COFCO to promote the meat industry and provide safe meat products. Bringing in the four strategic investors is an action by COFCO to diversify our equity ownership and enhance our corporate governance. We look forward to creating synergies among the shareholders to improve the operations and management of COFCO Meat, and together grow COFCO Meat into a much bigger actor in China’s meat industry. ”