BRAZIL, São Paulo. The Brazilian meatpacker BRF SA – one of the country’s largest food processors – has agreed to invest $20 mill. in China’s pork company Cofco Meat.
The São Paulo-based company announced that its shareholders had agreed to buy $20-mill.-worth of shares in China’s Cofco Meat in an initial public offering, expected in the Hong Kong Stock Exchange on 1 November.
Cofco Meat, part owned by KKR & Co, a US-based private equity firm, is a rapidly growing, vertically integrated pork business in China, according to BRF. Cofco Meat reportedly operates 47 pig farms, two abattoirs and two meat-processing factories spread across mainland China. The business has the capacity to rear 1.5 mill. pigs per year, slaughter 4.5 mill. hogs per annum with a capability of producing 18,000 t of meat. The business also breeds 24 mill. chickens and can slaughter 110 mill. birds per year.
BRF and Cofco Meat have also entered into a non-binding strategic venture to strengthen both parties moving forwards. This will include bolstering BRF’s knowledge of Chinese laws and regulations governing meat production, as well opening to doors to joint investigations into opportunistic collaboration further down the line. BRF called the move a “cornerstone agreement” that will see the business enhance its ability to manoeuvre and grow in China’s rapidly-growing pork industry.
Brazil has recently embarked on an aggressive multi-million dollar expansion strategy that has seen the business move to acquire stakes in meat companies around the world. In 2016 alone, BRF has acquired stakes in a number of companies, including: Argentina’s Globosuínos for $5.6 mill., UK’s Universal Meats for $49.5 mill. and Malaysia’s FFM Berhad for $16 mill.