Zhongpin starts pork plant expansion

Zhongpin will invest about $6.3 million to further improve the plant’s pre-cooling room and equipment and to expand the plant’s production capacity for chilled pork. With the expansion, Zhongpin will increase the plant’s capacity by 35% to an annual capacity of 85,000 metric tons from the current 63,000 metric tons. After the expansion, chilled pork will account for about 70% of the plant’s capacity, up from the current 60% of capacity. The four-month project is scheduled to be completed in July this year.

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Mr. Xianfu Zhu, Chairman and Chief Executive Officer of Zhongpin Inc., explained, “Our presence in Anyang and the north China market has successfully increased the demand for our products, especially for chilled pork. The improvements we are making this year in our Anyang plant should help meet the rapidly growing demand for high quality chilled pork that we expect in north China over the next several years.”

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Zhongpin’s Anyang plant began operations in September 2007. In 2009, it reached an average annual capacity utilization rate of about 82%.

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In Zhongpin’s marketing strategy, north China is one of the company’s important markets. With the company’s expansion in its geographic markets and distribution channels, the demand for its chilled and frozen pork continues to rise. One factor that adds to Zhongpin’s growth is that smaller pork processing plants are gradually shutting down because they are unable to meet the government’s latest stringent sanitary standards. Zhongpin’s expansion in the Anyang plant will help satisfy the growing demand for Zhongpin’s products in that target market.

During the expansion, the Anyang plant’s operations and pork distribution to the market will operate as usual.

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