Wednesday, September 3, 2008

Nasdaq-listed Zhongpin Inc (HOGS.NASDAQ) Link

A few key takeaways....

"New pork processing industry regulations take effect at the start of August. How will these affect your company? We view this as a positive for Zhongpin as the new regulations will definitely speed up the modernization of the pork processing industry in China and encourage the transition from the traditional wet market to modern “dry” market processing. We expect that some processors who cannot meet the national standard will eventually leave the industry and consumers will have better access to safer and healthier pork products. As a leading meat and food processing company that utilizes state-of-the-art equipment and advanced technology in our production, we believe the new regulation will enable us to seize opportunities for further expansion and increase our market share, especially in second and third-tier cities"

"When do you expect to complete your new factories, and how will this increase your total production capacity? The new factory in Luoyang City had already started production at the end of June and the Shangqiu plant will begin operations by the end of the fourth quarter of 2008. These two plants will increase our capacity of chilled and frozen pork to 471,560 metric tons, excluding outsourcing from OEMs, equivalent to a 42% year-over-year growth rate. In September 2008, a new facility in Changge City with 28,800 metric tons of prepared meat will start production, which indicates our capacity will increase 114% to 54,000 metric tons per year after completion. Our annual production capacity of fruit and vegetables will increase by 114% to 56,280 metric tons when a facility in Changge comes on-line by the end of this year."

Dan Ross

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