Zhongpin 3Q net income, revenues up

by Bryan Salvage
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CHANGGE, China – Zhongpin Inc. reported for the third quarter ended Sept. 30 compared to the third quarter ended Sept. 30, 2010, net income increased 25 percent to $18.3 million from $14.7 million while revenues increased 65 percent to $398.1 million from $241.1 million. Total tonnage of pork and other products sold was up 6.8 percent, with average prices up 54.6 percent.

The company is a meat and food processing company specializing in pork and pork products, vegetables and fruits and is based in China.

The company’s construction projects are reportedly on schedule, with three coming into operation in the fourth quarter. Zhongpin began operating its phase two facility in Tianjin in September. Phase two has a production capacity of 36,000 metric tons for prepared pork products. Phase one began operating in January 2010 with a production capacity of 100,000 metric tons for chilled and frozen pork.

Zhongpin is also investing about $61.5 million to build a slaughter and processing plant, low-temperature prepared pork plant, logistics center and research and development center in Nong'an county in Changchun, Jilin. The company expects to begin operating the chilled and frozen pork facility in the fourth quarter of 2011 and the prepared pork products facility in the third quarter of 2012.

About $63.0 million is being spent to build a production facility, warehouse and distribution center in Taizhou, Jiangsu. This facility will have a production capacity of about 80,000 metric tons for chilled and frozen pork, including easy-to-cook products, 20,000 metric tons for frozen pork and 30,000 metric tons for prepared pork products. Construction began in September 2010. The chilled and frozen pork facility will begin operations in the fourth quarter this year and the new facility for prepared pork products in the third quarter of 2012.

Zhongpin is investing approximately $58.5 million to build a new production, research and development and training complex in Changge, Henan. When complete, this new facility will have a production capacity of about 100,000 metric tons for prepared pork products. Adjacent to this new facility, the company expects to develop a center for research and development, training, and quality assurance and control.

Construction for the first phase with an annual production capacity of about 50,000 metric tons for prepared pork products began in the first quarter of 2011 and should be completed by the fourth quarter of 2011. The second phase, with a production capacity of about 50,000 metric tons for prepared pork products, should be completed by the fourth quarter of 2012. Zhongpin plans to open the research and development and training center by the fourth quarter of 2012.

The company is investing approximately $18.0 million in a cold-chain logistics distribution center in Anyang, Henan. It also plans to spend approximately $87.5 million in a chilled and frozen food processing and distribution center in Kunshan, Jiangsu, near Shanghai.
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