Japfa subsidiary plans acquisition of Chinese dairy farms

Japfa, the largest poultry producer and feed producer in Singapore, hopes to expand with the proposed acquisition of two dairy farms in China’s Shandong province.

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dolgachov | Bigstock.com
dolgachov | Bigstock.com

Japfa, the largest poultry producer and feed producer in Singapore, hopes to expand with the proposed acquisition of two dairy farms in China’s Shandong province.

In announcing the proposed acquisition, Japfa stated that it had reached an agreement to acquire the entire issued capital of Falcon Dairy Holdings Limited, which is a joint venture between Fonterra Tangshan Dairy Farm Limited, Abbott Overseas Luxembourg and New Zealand Milk Limited. Falcon owns the two dairy farms, which collectively have a capacity of about 16,000 dairy cattle.

The proposed acquisition, announced on June 28, has been valued at US$123.4 million. Once the transaction is completed, the Falcon facilities will become part of Japfa’s AustAsia subsidiary, a unit of which Japfa holds 75% of the shares.

According to the company, acquiring the two existing farms was a desirable option because it provided “further production capacity of quality raw milk in a significantly shorter time compared with building new farms from scratch.”

Japfa further stated that the Falcon farms are a good fit because the construction and design of the farms are similar to AustAsia’s standards, and they are strategically located in Shandong, which places them in close proximity with AustAsia’s Hub 1 farms, with benefits from operational synergies and the sharing of infrastructure.

The deal also includes two additional sites of land in Shandong that potentially can be further developed, Japfa stated.

A diversified agrifood company, Japfa, according to the WATTPoultry.com Top Companies Database, is Singapore’s largest poultry producer and the 27th largest broiler producer in the world. For its poultry division, it works with more than 10,000 commercial farms to produce upwards of 600 million day-old chicks per year. During the past year, it slaughtered 320 million head of broilers.

Japfa also ranks as the world’s 22nd largest producer of animal feed, with an annual production of nearly 4.8 million metric tons of feed. It operates 36 feed mills, according to the Feed Strategy Top Companies survey.

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