Chinese poultry processor eyes African and Asian export opportunity
The delegation, made up of firms from African and Asian nations, visited Yongda (also known as Henan Yongda), a large breeder, processor and distributor of poultry products based in the central Chinese province of Henan.
The company is seeking to sharply increase exports of 11,000 tons in 2016, according to company CEO Feng Yongshan. He’s aiming for 17,000 tons in 2017. “We aim to be China’s leading exporter of poultry products,” he explained to local media in a briefing on the visit. Like many local meat firms with similar ambitions Feng is putting much hope in China’s One Belt One Road blueprint to increase exports through better transport connections – in particular to under-served developing countries with growing consumption power.
The delegation visiting Yongda’s headquarters, in Hebi, Henan province, included representatives from Sri Lanka, Brunei, Laos and Zimbabwe, as well as Egypt and Djibouti. The group’s costs are covered as guests of China’s Ministry of Commerce as well as the international cooperation wing of China’s Ministry of Agriculture.
The delegation was shown Yongda’s range of packaged and halal poultry products, according to company boss Feng. Local representatives from China’s Animal Husbandry Association – a government-affiliated body – were also on hand to introduce China’s poultry sector and breeding plans.
China wants to cooperate with developing countries in animal husbandry in their home countries, said Feng. His firm has sent sales delegations to check out potential markets in the former Soviet Union, visiting Armenia, Belarus, Kazakhstan and Kyrgyzstan.
Yongda is a provincial government-nominated “demonstration company” for industry to study “standardised poultry production” explained Feng, and, as such, has an edge on smaller competitors.
Given it is the Year of the Rooster in the traditional Chinese lunar calendar Feng’s optimism on exports may be well placed. While labour costs are considerably lower in developing countries in Asia and Africa compared to China, few can boast
China’s competitiveness given the industrial capacity and scale of production boasted by the country’s meat sector.
Such scale allows firms to sell cheap products: Yongda retails bags of breaded chicken nuggets at RMB5 for 280g. Similarly, it sells a pre-cooked frozen 920g bag of “New Orleans-style” chicken legs at RMB33 per bag. Dressed in barbecue sauce, New Orleans-style chicken has become popular in China since it was introduced by fast food firm KFC as a burger.
However, even as firms like Yongda look to export markets, it should be noted that China is in the midst of a decline in poultry production: the US Department of Agriculture has projected 2017 production of 11.0 million metric tons, down 11% year on year due to a tightening supply of broilers. That said, China remains the top supplier of imported chicken to Japan, Hong Kong and Macau. And while China’s exports to key markets like Malaysia have declined, there was a 10% rise in exports to Afghanistan in 2016 to over 6,500 tons, while exports to Mongolia were up 77% year on year in 2016 to 6,100 tons. Exports of 4,945 tons to the former USSR state of Georgia were down 10% in 2016. Key Western markets included the UK (up 10% year on year to 5,632 tons in 2016) and the Netherlands at 7,252 tons – up 7% year on year in 2016.
