DaChan Food in search for money for food investments
DaChan Food, a manufacturer of poultry meat, animal feeds
and processed food, launched is institutional roadshow for an initial public
offering in Hong Kong last Friday. The manufacturer aims to raise up to HK$930
million ($119 million).
The listing candidate is a Mainland-based subsidiary of Taiwan-listed
DaChan Great Wall Enterprise and ranked the largest chicken slaughterer in China
Apart from being an exclusive sourcing agent for McDonald's in China,
DaChan is responsible for one-third of the supply of chicken meat to KFC in
China and is the largest processed food exporter for Ito-Yokado and 7-Eleven in
It is also one of the top 10 animal feed producers in China, the second
largest supplier of animal feed in Malaysia and the third largest in
In 2006, 59% of the company's revenue came from the production of chicken
meat, while the production of animal feeds contributed 35%. Processed food
accounted for only around 6% of its income, but this is expected to increase
over the next few years.
The company mainly wants to invest in the processed food section, because
profit margins are much better than in producing raw materials (meat, feed) for
To achieve this, DaChan is going to spend more than half of the net IPO
proceeds to expand its production capacity, especially within the processed food
The company will also reserve funds for potential acquisitions, expansion
of sales and marketing, as well as research and development.
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