Zhongpin Expands Into Premium Food Oil Business

The new plant will benefit from all the same modern process engineering and information technology advances we have been applying to all of our facilities.

26 Aug 2009 --- Zhongpin Inc., a leading meat and food processing company in the People's Republic of China, announced that it will enter the premium food oil business.

This new business line will further enhance the brand identity of Zhongpin, broaden its product lines and core competencies, increase capacity utilization and profitability, and reduce waste.

"In addition to increasing our brand identity, core competencies, product lines, and production capabilities, this expansion has two other benefits," said Mr. Xianfu Zhu, Chairman and CEO of Zhongpin. "First is the expected increase in our return on investment, which is one of our primary financial goals. And second is further effective utilization of the raw materials we consume in our pork and pork processing production, since premium food oils will be co-products from our current processing. The new plant will benefit from all the same modern process engineering and information technology advances we have been applying to all of our facilities. We have only one production standard -- the world's highest product quality and safety in the pork industry."

The premium food oils will be sold through Zhongpin's existing sales channels to both wholesale and retail customers. Wholesalers will include business customers, such as well-known food companies as well as large high-end chain restaurants. Individual consumers will be able to buy the new premium food oils in Zhongpin's retail stores and in network stores that carry the Zhongpin line of branded food products.

The new plant, to be located in the Zhongpin Food Industrial Park in Changge, Henan province, will have an initial annual capacity of 20,000 metric tons for premium quality food oils. Construction is planned to begin in September 2009. The plant, with state-of-the-art manufacturing processes, is expected to be operating in the second quarter 2010. The total investment in the new project is approximately RMB 38 million or US$ 5.6 million.