Cargill to sell China poultry unit to private equity firm DCP Capital

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U.S. agribusiness giant Cargill has agreed to sell its poultry business in China to private equity firm DCP Capital, it said in a statement on Wednesday.

The sale of the unit known as Cargill Protein China is subject to regulatory approvals but is expected to close this year, it added.

Cargill did not give a transaction price and DCP declined to comment on the deal.

China is the world’s No.2 poultry producer after the United States, producing about 19 million tonnes of chicken meat last year.

Many producers there have struggled with low prices as China’s tough COVID restrictions shuttered restaurants and canteens, the most important sales outlet for the meat.

Large integrated local firms have however continued to expand, outpacing operations such as Cargill’s.

Wellhope Foods slaughtered 700 million chickens last year and has a goal of 1.5 billion birds by 2029.

The sale announced on Wednesday includes chicken farms in Chuzhou in eastern Anhui province and related manufacturing sites that can process 65 million birds annually.

The U.S. company started its China poultry operations in 2011, breeding, raising and processing the chickens. In 2019 it added a $48.8 million plant to the operations.

The company also introduced plant protein products in 2020 produced in the Anhui facilities.

China’s DCP Capital has invested in several other food and agriculture businesses including one of China’s top poultry producers Fujian Sunner Development, its website says.

It also said the private equity firm was focused on Greater China and led by former members of the KKR and Morgan Stanley private equity businesses.

Source: Reuters