June 6, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

China is the world’s largest consumer of poultry products, and the demand for poultry meat continues to rise due to population growth, urbanization, and changing dietary preferences. 

Large-scale poultry producers utilizing advanced technology, modern equipment, and efficient processes with vertically integrated supply chains, and a focus on meeting food safety and quality standards, play a crucial role in meeting this increasing demand.

However, the market for large-scale poultry producers in China also faces challenges. Disease outbreaks, such as avian influenza, can significantly impact production and profitability. Moreover, concerns over food safety and quality are always present, resulting in consumers being more discerning about the source of their food. Despite these challenges, the market for large-scale poultry producers in China is vibrant and poised for continued growth.

Entering the segment is private equity firm DCP Capital, the leading international private equity investor in Greater China, which has recently agreed to acquire Cargill Protein China – Cargill’s poultry business in the country – for an undisclosed sum. 

Cargill explained that the deal included all Cargill Protein China entities and assets, including farms and related manufacturing sites in Chuzhou in the Anhui province, adding that the deal was designed to support the continued operation of the business in the country, and to sustain access for customers to the business’ high-quality products and services in China and the local community of Chuzhou. 

Noting the lack of modernization and advanced safety parameters in China’s food systems, Cargill began to plan its entrance to the country’s poultry sector in 2009. Ten years later, in 2019, the company invested nearly $50 million to launch an integrated poultry production plant in Chuzhou, and today slaughters almost 50 million broilers per year through its operations in the country. 

“Our high-performing supply chain sets an example for the industry as a sustainable and pricing competitive business model, which helps China to face the challenges in food safety and to satisfy people’s increasing demand for safe and high-quality animal protein,” Cargill explains on its website.

Once all regulatory approvals for the deal are secured, the transaction is expected to close this year. Until that time, Cargill Protein China will continue to run the company. However, once completed, DCP Capital will work to grow the business, stated Cargill. 

Cargill stated, “China remains an important market for Cargill. The company has proudly operated in the region for over 50 years and will continue to evolve to best serve the growing domestic food and agricultural markets throughout Asia.”

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

*The content put forth by Global AgInvesting News and its parent company HighQuest Partners is intended to be used and must be used for informational purposes only. All information or other material herein is not to be construed as legal, tax, investment, financial, or other advice. Global AgInvesting and HighQuest Partners are not a fiduciary in any manner, and the reader assumes the sole responsibility of evaluating the merits and risks associated with the use of any information or other content on this site.