Bright Food unit to spread wings in NZ

A Shanghai Maling Aquarius Co Ltd stand at a food exposition in Shanghai. [Photo provided to China Daily]

Bright Food unit to buy 50% stake in Silver Fern Farms

Shanghai Maling Aquarius Co Ltd, a unit of the State-owned Bright Food Group Co Ltd, is acquiring a 50 percent stake in New Zealand's biggest meat cooperative for NZ$311 million ($197 million), as China looks to import more agricultural products to satiate demand from consumers.

Sheep and beef exporter Silver Fern Farms said on Tuesday that the stake sale will give it funds to repay debt and boost exports. Consequent to the deal, Shanghai Maling will become the top beef and lamb processor in China, with expected operating revenues of 25 billion yuan ($3.9 billion) to 30 billion yuan.

In addition, the company will have a comprehensive platform to slaughter, process and export beef and lamb products.

"The deal will also give Maling access to 25 percent of the high-quality beef and lamb supply sources. This will support the company expansion plans and cater to the growing need for high-end beef and lamb products from local consumers," the Chinese company said in a statement to the Shanghai Stock Exchange.

New Zealand is the world's biggest lamb exporter and the fifth-largest overseas supplier of beef, with more than 30 percent of its export in value terms flowing to the Chinese market.

Silver Fern Farms, a farmers' cooperative, controls about 27 percent of New Zealand's beef and lamb exports and is the second-largest agricultural product exporter in New Zealand after Fonterra Cooperative Group Ltd.

Its beef and venison products are ranked first in terms of market share in New Zealand, while in lamb it is placed second.

The Maling deal is the latest in a series of overseas agricultural investments by Chinese companies.

Shuanghui Group, a Chinese meat processor based in Luohe, Henan province, completed the $7.1 billion acquisition of the United States-based pork processor, Smithfield Foods Inc, in 2013.

According to the target set in the 12th Five-Year Plan (2011-15) for the food industry, 10 large enterprises with sales revenue of more than 10 billion yuan will be set up, and two or three of them will be globally influential and competitive by the end of this year.

"With rising public attention of food quality, more traditional meat processors like Maling and Shuanghui are expanding their functions to be capable of raising livestock, producing and delivering meat products," said Hu Yanchao, an analyst from Qilu Securities Co Ltd in Jinan, Shandong province.