Meat industry is big business in China
China Meat Association (CMA) secretary general Chen Wei said that only 20% of the country’s 10,000-plus slaughterhouses were large in scale, with the rest “artisanal or unmechanised”. He noted, however, that the sector is changing, with the number of large companies rising from 30 in 2010 to 42 a year later.
Speaking at the China International Meat Industry seminar, part of this week’s annual trade fair of the same name, he said assets in the slaughtering and processing industry were now Chinese yuan renminbi CNY367bn (US$58bn) in 2011, up 26% year-on-year. The sum of losses made by meat processing firms, meanwhile, was down 20% year on year to CNY1.19bn (US$189m).
Sales for canned produce rose 42.5% in 2011 to CNY19.2bn with net profit for that segment up 52% year-on-year. Chinese meat processor Yurun led the local pack in 2011, with CNY90.7bn (US$14.4bn) in sales revenue reported, although recent weak results must be a concern. Behind Yurun in 2011 was rival New Hope with sales of CNY75bn (US$11.9bn) and Shuanghui with sales of CNY50.3bn (US$ 8.04bn).
There was bad news last year for foreign-owned meat firms operating in China, with numbers falling from 258 firms in 2010 to 212 in 2011: their share of the sector’s total assets, revenue and profit dropped by 3.4%, 2.6% and 7% respectively in 2011 compared to 2010. There are also signs that state-owned firms are exiting the sector, with the number of state-owned meat processors falling from 165 to 105.
Meat executives attending the seminar also heard that pig prices are currently at a low point following record highs in 2011, giving meat processors space to improve margins. However, pork retail prices have also fallen, partly through government-run efforts to tame food inflation.
There were also concerns raised about over-capacity at meat processing companies: anecdotal evidence noted at the conference certain Shuanghui and New Hope pig processing plants are operating at 60% capacity due to a shortage of quality pigs.
The CMA represents China’s meat processing firms but is also an avenue for foreign meat importers seeking access to the Chinese market. Co-sponsors of the trade fair run in conjunction with the seminar included the Canada Pork International export promoter and the Danish Agriculture & Food Council, both of whom have been keen to tap Chinese demand for pork offal. Another sponsor, Ireland’s food promotion authority, Bord Bía, is seeking access to China for Irish beef.