Chinese company steps up halal beef production

By Mark Godfrey

- Last updated on GMT

The plant is expected to open this month
The plant is expected to open this month
A leading Chinese beef firm with overseas halal sales is opening a new plant this month that will double its capacity.

With operations in breeding and slaughtering (as well as feed processing), Henan Yisai Beef (Stock) Co has announced it is putting the “finishing touches​” to a plant with annual processing capacity of 200,000 head in Kailu near the city of Tongliao, in the sparsely populated area of Inner Mongolia where much of China’s new feed lot and processing capacity is being concentrated. The local government in Kailu, meanwhile, has suggested the plant will open this month.

The launch of the plan (construction first began in June 2016) will give Yisai – which is headquartered in Henan province, central China – total annual processing capacity of 400,000 head. One of a handful of major players in a highly fragmented Chinese beef market, Yisai appears to be aiming for scale by contracting local farmers as suppliers. The Tongliao project will engage 50,000 local farmsteads in breeding stock and will employ 5,000 workers, according to the firm.

Financial results suggest significant growth at Yisai, which announced revenues of RMB1.574 billion per year in 2017 - up 30.5% on the 2016 figure while profits rose 12% year-on-year to RMB88 million (m). That’s more than double Yisai’s reported revenues of RMB630.1m for 2014 (itself an impressive 63% increase year-on-year).

Listed on China’s ‘third board’ or enterprise-style stock market for small and medium firms, Yisai issued 30 million new shares in 2016, at RMB6 each, to raise RMB180m. At the time, Yisai general manager Mai Yingpang said the money would help drive the company’s expansion overseas and growth of its branded products portfolio at home.

Even though Yisai has long made expansion of overseas halal sales central to its growth strategy – one of its advertising tag lines describes the company as ‘China’s innovative Muslim meat company’ –more recently, the firm seems to be seeking to tap rising Chinese consumption of beef and mutton.

Chinese consumers are already familiar with the company’s logo – featuring a cow’s horns against a green background – from its many restaurants and stores, which serve favourite snacks like beef noodles.

Getting enough cattle may prove crucial to Yisai’s plans. In 2014, the firm opened beef processing capacity capable of handling 100,000 head of cattle per year. From that plant, Yisai supplies Walmart and Carrefour, as well as McDonald’s and local hot-pot chain Hai Di Lao.

In 2011, Yisai (the ‘yi’ part of the name uses the same character as that used to write Islam in Mandarin) built what it termed as China’s largest cooked food assembly line, a giant factory kitchen producing ready and convenience meals, increasingly popular in a rapidly urbanising China. From that plant Yisai has launched a range of convenience-themed packaged beef products, including cooked fillets in 200g packs dressed with black pepper and other Chinese-style flavours. The Yisai range is clearly stamped ‘halal’ in Arabic and Chinese script.

Yisai – which also processes lamb – has promised investors it will piggyback the Chinese Government’s ‘One Belt One Road’ plan as a means of tapping demand in Muslim majority countries like Malaysia, Indonesia, Bangladesh and Central Asian states – all countries covered by the plan, which aims to build infrastructure to integrate the region into China’s trade orbit.

Henan Yisai Beef (Stock) Co was established in 2002 in the heavily populous central Chinese province of Henan, which is also home to China’s biggest meat company, Shuanghui. Company founder and general manager Mai Yingpang made his money from coal trucking. 

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