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Regrouping gives birth to new company

BEIJING Capital Agriculture Group, which is centered on the city's major milk supplier Sanyuan Group and two poultry product makers, opened for business in Beijing on Saturday.

Sanyuan has absorbed the assets of Huadu Group and will manage the operations of Beijing Dafa Chia Tai Co, the other party in the regrouping, Xue Gang, general manager of the new company, told a press conference to mark the event. He served as chief manager of Sanyuan.

The total assets of the new company touched 15 billion yuan (US$2.2 billion), and it employed nearly 40,000 people. Sanyuan, which alone has assets of 10 billion yuan, will serve as the listed company of the new agriculture group, according to the deal.

The regrouping would help enhance the company's capacity in poultry raising, food processing, and bio-medicine development, Xue said.

Group President Zhang Fuping said the new company will make full use of the capital market and seek more ways to raise capital.

In March, Sanyuan acquired the core assets of Sanlu Group for 616.5 million yuan, which went bust in the wake of the baby milk scandal that left six infants dead and sickened some 300,000 others. It later gained 95 percent of the shares in Sanlu's company in Shandong Province for 49 million yuan.

Sanyuan was one of the few large dairy producers whose products had been tested as being clear of melamine contamination.

"One of our major tasks at this stage is business restructuring. We will not rule out the possibility of buying other assets," Zhang said.

Huadu and Dafa, the other two parties in the new company, were major domestic chicken product suppliers.


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