CHONGQING, CHINA — China Xiangtai Food Co. Ltd. (PLIN), an emerging growth company primarily engaged in pork processing in China, on March 27 announced that the company, through its subsidiary Chongqing Jinghuangtai Enterprise Management Consulting Co., Ltd., entered into a non-binding memorandum of understanding (MOU) to acquire 51% controlling interest in Chongqing Ji Mao Cang Feed Co., Ltd. (JMC).
JMC, a private enterprise specializing in feed raw material sales and providing feed formula solutions to expand the southwest market in China, has more than 200 farmer customers and nearly 100 customers in the feed production industry. In 2019, JMC sold more than 200,000 tonnes of soybean meal, exceeding $70 million in sales. Given the company's revenue of fiscal year 2019 was $102.5 million, PLIN said it expects to increase 70% of 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,” said Jiaping Zhou, general manager of JMC. “JMC stands to benefit greatly from PLIN’s senior experience and resources in the food industry, and values PLIN’s continued involvement as we look to further expand JMC's profitability with the development of production capability and enhancements to our distribution channels.”
Zeshu Dai, chairwoman and chief executive officer of China Xiangtai Food, said, ”We are enthusiastic about partnering with JMC to continue accelerating the growth of the company. 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.”
Xiaohui Wu, president and director of China Xiangtai Food, said the integration will further strengthen PLIN’s dedication in assuring people’s basic needs, as well as highlight both companies’ efforts to fight for respective industry leading position in Chongqing City and Sichuan Province.
“The robust marketplace not only creates a new business model for industry chain enterprises to unite and strategically increase profitability through maximizing capability allocation, but also boosts competitiveness by providing related supporting services throughout the industry chain,” he said.