Tingyi to expand into meat processing with Prima JV

Tingyi, a Chinese producer of instant noodles and beverages, has entered into a $24m joint venture agreement with Japanese ham and sausage maker Prima Meat Packers to foray into the meat processing market.

The two companies will cooperate to process meat and poultry products in the Jiangsu province, China. Tingyi will hold a 60% stake in the joint venture, while the remaining 40% will be with Prima Meat Packers.

The $24m registered capital, contributed by the companies in proportion to their equity interest, will be used to procure manufacturing equipment and construction of a new facility.

Tingyi said that the new company will be considered as its subsidiary, whose accounts would be consolidated into the financial statements of Tingyi.

According to the company, the new joint venture will enable it to expand its instant food business in China and to produce a diversified range of food products such as ham, sausage and bacon.

Prima Meat Packers, which is 40% owned by Japan’s trading house Itochu, is a leading ham processing company in Japan, and operates four facilities, two R&D centres and eight logistics centres.

Tingyi, based in Tianjin, China, is involved in the production and sale of instant noodles, beverages and instant food under the Master Kong brand.

In March 2012, Tingyi finalised a transaction under which it became PepsiCo’s franchise bottler in China and in exchange, PepsiCo acquired a 5% stake in Tingyi’s beverage unit, with an option to raise it up to 20%.

In the same month, Tingyi reported a 12% decline in 2011 net earnings to $419.55m, due to increasing costs and slow growth in the beverage segment.