Marfrig investments in China include poultry integration

18-04-2011 | |

Brazilian meat packer Marfrig Alimentos has announced the creation of two joint ventures in order to explore opportunities to supply food products and meet the growing demand for distribution in the Chinese market, including a $57 million investment in a poultry vertical integration.

Marfrig said it will invest a total of $309 million in order to form the two joint ventures, through its international arm called Keystone Foods.

The first joint venture estimated at $252 million will be created jointly with China’s Cofco LTDA. Marfrig’s Keystone will hold a 45% stake in the venture, and 55% will be held by Cofco.

The second joint venture will form the Keystone-Chinwhiz poultry vertical integration. The joint venture (60% Keystone – 40% Chinwhiz) has been created with the objective of implementing a vertical integration in poultry operations in China and meeting the needs of its principal client for processed food, high quality and competitive costs.

The JV will initially have capacity to process 200,000 birds/day and will be able to supply 50% of the raw material needs of Keystone’s processing unit in China. The unit already serves over 2,600 restaurants in China, Hong Kong and Japan.

The role of Keystone will be to use the knowledge it gained from managing similar vertically integrated operations in the United States. Chinwhiz will bring its experience in the local agroindustry to build an integrated chain with biosafety and social responsibility.

The investment in the JV is estimated at US$ 57 million (fifty-seven million dollars) by the end of 2013.
With these investments, Marfrig plans to be strategically positioned to meet the growing demand for food in the Chinese market, with operations that range from processing to distribution to clients.

Source: Marfrig