Xiangtai Food to acquire controlling stake in Chinese feed solutions provider

CHINA- China Xiangtai Food, an emerging growth company primarily engaged in pork processing in China, has entered into a non-binding agreement to acquire 51% interest in Chongqing Ji Mao Cang Feed Company (JMC).

JMC is a private enterprise specializing in feed raw material sales and providing feed formula solutions. Xiangtai Food will acquire the controlling stake in the company through its subsidiary, Chongqing Jinghuangtai Enterprise Management Consulting.

Xiangtai Food, also known as PLIN, said that the acquisition will enable the company to further expand in southwest China, leveraging JMC’s strong presence in the region.

JMC has entered strategic alliances with large grain and oil companies such as Sinograin, COFCO, Cargill, Good Ocean, and Louis Dreyfus, and has obtained general distributorship in Chongqing, Sichuan and other places.

In 2019, JMC sold more than 200,000 tons of soybean meal, exceeding RMB 500 million (about US$70m) in sales.

Given the company’s revenue of fiscal year 2019 was US$102.5m, Xiangtai Food said that it expects to increase 70% of its revenue through this acquisition.

“We are pleased to have an opportunity to start a partnership with a Nasdaq listed company, and it is regarded as an essential milestone in JMC’s history,” commented Ms. Jiaping Zhou, the General Manager of JMC.

If the transaction goes through, JMC stands to benefit greatly from Xiangtai Food’s senior experience and resources in the food industry.

Ms. Jiaping said that the company is also looking to further expand its profitability with the development of production capability and enhancements to its distribution channels.

“We are enthusiastic about partnering with JMC to continue accelerating the growth of the Company,” said Ms. Zeshu Dai, Chairwoman and CEO of China Xiangtai Food.

“This move is in line with our growing strategy of solidifying our industry position by gaining additional market share and expanding our product portfolio.

“With JMC’s capability in feed raw material and formula solutions, we can improve our industrial chain and our competitiveness to position well for the expansion.”

Xiangtai Food’s current operations span key sections of the pork processing value chain, including slaughtering, packing, distribution, and wholesale of a variety of fresh pork meat and parts.

While Xiangtai’s primary focus is on pork products, the company also offers other fresh and processed products, including beef, lamb and poultry.

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