Chinese egg companies in hunt to find Western acquisitions

By RJ Whitehead

- Last updated on GMT

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iStock

Related tags: Supply and demand

Western egg processors are in the sights of Chinese corporations looking to accelerate their technical knowhow in line with their growing dominance of Asia. 

According to Morten Ernst, of the International Egg Commission, Chinese egg businesses now control a 60% share of the Asian market—a segment many Western have missed out on in recent years. 

Buoyed by huge demand in Asia, they are keen to look westwards to boost their supplies, with established egg companies being seen to be especially attractive.  

China is gong west​," Ernst said, adding that this will mainly be achieved through foreign expansion and acquisition.

American egg producers are most at threat from Chinese interest as they continue to supply a subdued market. They currently face a 10-year low in pricing and ongoing over-supply issues following a bird flu outbreak in 2015.

The crisis sparked a 30-40% decline in demand for egg products. Now faced with a surplus of birds, the industry has in turn only recovered slowly.

Not only would some American targets prove to be cost-effective investments, in the eyes of Chinese egg majors they could also offer well-developed production and supply-chain technology at a time when Asia needs to improve efficiency in distribution.

Related topics: Business, East Asia, Industry growth, China

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