BEIJING, CHINA, U.S. — Deyu Agriculture Corp. announced on June 12 that it has formed a supply relationship with Guangdong Wen's Food Group Co., Ltd. (WFG), in which Deyu shall provide raw corn to four of WFG's feed mills in Southwestern China on a non-exclusive basis.
The company has recorded $3 million (RMB 20 million) in sales revenue attributable to WFG since shipments commenced to WFG in January 2012, which is equal to approximately 7,600 tonnes of raw corn. Deyu said it anticipates this to be an ongoing supply relationship with WFG. Overall, the four feed mills use approximately 200,000 tonnes of raw corn per year.
Founded in 1983, WFG is a large-scale modern multi-industry and trans-regional livestock enterprise that is engaged mainly in the feed, poultry and pig industries. WFG's business operations involve bio-pharmaceutical and food processing in 20 of China's Provinces, and it has established more than 110 integrated companies. In 2010, WFG achieved sales revenue of RMB 21.94 billion, and its feed production amounted to 5.14 million tonnes. In 2011, WFG's feed production approached 10 million tonnes. In view of this growth, Deyu said it believes it will be well positioned to serve WFG's trending demand for its feed products.
"Corn is the foundation of our business, and we are very pleased to establish a new relationship that supports this segment," said Jianming Hao, chief executive officer and chairman of Deyu. "By working with WFG, we are confident that will be able to build upon the success that our corn division experienced last year, as this business segment increased its sales 156% from $69.5 million in fiscal 2010 to $177.7 million in fiscal 2011. Our new advanced processing center boosted our total storage capacity and annual turnover of corn to over 100,000 tonnes and 700,000 tonnes, respectively, and we believe that our robust corn reserves and output capabilities will facilitate our supply to WFG, and help foster further progress in our corn division."