FinancialBuzz.com’s latest Buzz on the Street Show: Featuring Our Corporate News Recap on “China Xiangtai Food Co., Ltd. Enters into MOU to Acquire Controlling Interest in Chongqing Ji Mao Cang Feed Co., Ltd.”
China Xiangtai Food Co. Ltd. (NASDAQ: PLIN) (the “Company” or the “PLIN”), an emerging growth company primarily engaged in pork processing in China, today announced that the Company, through its subsidiary Chongqing Jinghuangtai Enterprise Management Consulting Co., Ltd., entered into a non-binding Memorandum of Understanding (the “MOU”) to acquire 51% controlling interest in Chongqing Ji Mao Cang Feed Co., Ltd.(“JMC”), a private enterprise specializing in feed raw material sales and providing feed formula solutions, to expand the southwest market in China.
Headquartered in Chongqing, China, China Xiangtai Food Co., Ltd, is a food company primarily engaged in pork processing. The Company’s operations span key sections of the pork processing value chain, including slaughtering, packing, distribution, and wholesale of a variety of fresh pork meat and parts. Primarily focused on pork products, the Company also offers other fresh and processed products, including beef, lamb and poultries. Through its core values, the Company is committed to maintaining the highest standards of food safety, product quality, and sustainability to provide high-quality, nutritious, and tasty food in a responsible manner through its portfolio of trusted brands.
The food processing and handling sector provides the equipment and solutions to produce, process, and distribute food to billions of households around the world. It also services a uniquely diverse value chain, ranging from farming to logistics. In recent years, the sector has become increasingly important as the world’s population has grown and higher incomes cause a shift in preferences. In fact, the stable expansion in emerging markets, urbanization, and rising living standards are all triggering a dietary shift to higher-value-added products, fueling demand for processed and packaged food and leading to higher equipment sales. As explained in a research report published by McKinsey & Company, emerging markets are driving most of this growth, with Asia expected to contribute about half of global growth between 2017 and 2021. The changing consumer preferences will specifically help boost organic and healthier food markets and food safety regulation will lead to product & menu expansion, higher standards, and a more intense focus on traceability. Additionally, the food processing market is expected to reach an estimated USD 4.1 Trillion by 2024 with a CAGR of 4.3% from 2019 to 2024, according to data published by Research and Markets.
Demand for organic food, in particular, is growing fast, and the segment already has a high penetration in Europe and North America. Currently, the highest organic market share globally is in Denmark, where it accounts for 8.4% of total sales, according to McKinsey. Food companies have started reformulating products to meet the new organic standards. And factors driving the rising demand for organic products include increasing government support for organic agriculture, expansion of organic products beyond the natural channel, and the increasing popularity of organic foods in restaurants. Another segment that is growing rapidly is meat and dairy; the market value of processed meat is expected to cross the trillion-dollar mark by 2024, which is a phenomenal increase from its 2019 valuation of USD 587.15 Billion, according to data provided by Market Data Forecast. And, as the demand for meat rises worldwide, so must the production of meat. In fact, most of the world’s meat is produced in Asia, which generated 140 million metric tons of meat in 2016.
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