Cobb Vantress inks deal for major stake in China firm
by July 30, 2013 7:43 pm 140 views
Tyson Foods’ subsidiary Cobb-Vantress said it signed a joint venture agreement with China-based Hubei Tong Xing Agriculture Co., an integrated chicken company. The Siloam Springs-based poultry breeder will produce and sell parent stock for the venture.
Under the agreement signed by Jerry Moye, president of Cobb-Vantress and Yang Shenghong, chairman of Tong Xing, a total of $35 million will be invested in establishing grandparent farm and hatchery facilities in the city of Suizhou in Hubei province, west of Shanghai, to start producing parent stock early in 2015.
The joint venture company, officially known as Hubei Tong Xing Cobb Breeding Company, will be 85% owned by Cobb and 15% by Tong Xing with an initial production target of five million parents a year.
“Tong Xing has been one of our customers for the past four years and we’re excited at this opportunity to work closer together in this joint venture,” Moye said in a statement. “They are located in an area of China with a low chicken population, yet it’s very accessible with good transport links.
He said this deal represents a significant step forward for Cobb to get a foot on the ground in China.
“The time is right to enter China. We believe that in conjunction with our existing partner BPBC located in the north near Beijing, Cobb will be in a great position to build up volume across the country,” Moye said.
Cobb’s parent company, Tyson Food,s has invested heavily to fully integrate its production and processing in China because the demand for protein continues to rise and food safety issues have never been more relevant throughout mainland China.
“The investment by Cobb in Suizhou Hubei is warmly welcomed and supported by Suizhou Municipal Government and Hubei Provincial Agriculture Department. It will be the first and biggest grandparent operation in South and Middle China,” said Shenghong. “We believe Cobb will bring the latest technology to the poultry industry and provide clean and healthy breeders. It will be an excellent opportunity and valuable experience for Tong Xing to work together with Cobb to further improve the efficiency of integrated poultry production including breeder, hatchery, broiler, processing and biosecurity.”