Cobb-Vantress Inks Deal For Major Stake In China Firm

A Tyson Foods’ subsidiary may have found a way around future Chinese poultry bans: grow the chickens in China.

From our content partner, The City Wire:

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.

Moye 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 Foods 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.

You can read the full story from The City Wire here.

China has periodically blocked poultry imports from the U.S.  Last month, China, Japan and Russia banned poultry from Arkansas after an isolated case of avian flu in a commercial chicken house in Scott County was identified.