Yuhe International acquires ten breeder farms in China

07-01-2011 | | |

Yuhe International, a supplier of day-old chicken raised for meat production, or broilers, in the People’s Republic of China, has entered into a series of asset purchase agreements to purchase ten breeder farms in Liaoning and Henan Provinces, China, for an aggregate purchase price of RMB 108,686,716, or approximately USD 16.4 million.

The ten breeder farms are purchased from six individuals engaged in large-scale parent breeder raising businesses in China, where eight breeder farms are in Liaoning Province, and two are in Henan Province.

The ten breeder farms have a total production capacity of 950,000 sets of parent breeders, covering an area of approximately 91 acres  with a building coverage of approximately 1,471,869 square feet (136,740 square meters). The assets purchased include the buildings and breeding equipment for the breeder farms, as well as land lease rights with terms ranging between 20 years and 50 years. 

Upon closing, Yuhe will have an increased production capacity of 3.15 million sets of parent breeders, accounting for 8% of China’s broiler market in terms of production capacity. Geographic details for the ten acquired breeder farms are as following: one farm in Anshan City, Liaoning Province; One farm in Wafangdian City, Liaoning Province; Two farms in Haicheng City, Liaoning Province; One farm in Dandong City, Liaoning Province; Three farms in Shenyang City, Liaoning Province; and two farms in Zhoukou City, Henan Province.

Mr. Zhentao Gao, Chairman and CEO of Yuhe International, commented, “We are very pleased to acquire the ten new breeder farms in China as planned. The highlights of this acquisition lie in two aspects, one being that the Company had gained access to a large quantity of breeding land with reasonable terms; and the other being that we were able to retain a large number of experienced and skilled workers. Both factors are current bottlenecks to self-constructing such breeder farms.”

The Company also announced that the constructions of its hatchery facilities were progressing well. The third hatchery facility equipped with 60 hatchers has completed construction and commenced operation with the first batch of 40 hatchers. The fourth hatchery designed to have 100 hatchers will begin construction in the first quarter of 2011.

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