Cobb-Vantress Signs Joint Venture Agreement in China

CHINA - Cobb has become the first primary broiler breeding company to take a majority shareholding position in China for the production and sale of parent stock, with the signing of a joint venture agreement with integrated chicken producer, Hubei Tong Xing Agriculture Co., Ltd.
calendar icon 31 July 2013
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Under the agreement signed by Jerry Moye, president of Cobb-Vantress, Inc, 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 percent owned by Cobb and 15 percent 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,” said Jerry Moye. “They are located in an area of China with a low chicken population, yet it’s very accessible with good transport links.

“This represents a very significant step forward for Cobb to get a foot on the ground in China. Our strategy has been to develop relationships with our customers directly in the major world markets like the US, Brazil, and European Union.

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.

“We are seeing the chicken industry in China starting to mature, with greater strategic awareness of food safety. Customers such as the worldwide restaurant brands are looking for more rigorous supply chains and to partner with the right genetics.

“The Cobb broiler is already well established in the Chinese market with a reputation for consistent quality, feed efficiency, growth and health status. Now with the increasing trend to integration and further processing, the high meat yield of Cobb is becoming increasingly valuable to their producers.”

Yang Shenghong, chairman of Hubei Tong Xing Agriculture Co., LTD. commented: "We are excited to be the partner of Cobb in China. We have been very happy and confident with Cobb products.

“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.

“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.

“We see Cobb as a strategic partner, and look forward to working closely together with Cobb to build Tong Xing as a best model for Cobb products in China, and introducing our successful experience to the industry."

Currently the joint venture is targeting sites for farm and hatchery facilities, with the plan for construction work to begin before the end of the year and the first grandparent stock to be placed next summer. This would enable the first parent stock chicks to be hatched at the start of 2015.

China represents the second largest market for broiler breeding stock in the world, with chicken the fastest growing sector of meat production in the country.

Michael Priestley

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