China poultry firm targets growth in France
Henan Huaying Agricultural Development Co Ltd has been following up on leads from its showing at the recent Sial international food show in Paris.
The firm, which mounted a stall under the slogan ‘Duck Industry Leader’, is keen to sign up French poultry distributors to sell its Peking duck products in both bulk and packaged form. That’s according to company chairman Cao Jia Fu, who led a nine man delegation including a chef specialised in duck preparation to France’s capital.
“We were happy to see the innovations and products of producers in Europe ... we also found it to be a very effective platform to meet buyers,” noted Cao in an address to media back in China. Companies at the fair, he said, “expressed a very strong interest in cooperating with Huaying.”
Huaying already exports to Germany and the UK but wants to drive sales in the EU’s largest economy, notes Cao: he sees France as an important “gateway” to other EU markets.
While his firm supplies vast quantities of chicken to Chinese restaurants and retailers there’s a higher value niche in duck with duck restaurants positioned at the higher end of China’s catering market. Chains like Xiao Wang Fu and Quanqude (a client of Huaying) have in recent years opened more stores in mainland Chinese cities to cash in on demand among China’s middle class.
Exports are becoming a key goal for Huaying, which has projected an impressive 472% year on year jump in its net profit for 2016, up to RMB120 million (US$17.5m) from RMB17.5 million (US$2.6m)for 2015. That figure was put down to increased sales, but also to government subsidies in a company statement.
Frozen duck profitability
Having its headquarters in Henan province, central China, positions Huaying to supply a vast network of supply lines to clients like fast food chain KFC as well as big-box retailers like Carrefour, RT-Mart and WalMart. Huaying has also been hunting down export sales. It has credited export demand for its cooked poultry products for solid profits in the first half of this year, when profits jumped 223.69% on the same period last year while revenues at RMB1.05 billion (US$153.5m) saw a jump of 13.58% over the same period.
Exports however contributed to almost 6% of Huaying sales in the first six months of this year.
The company’s strategic plan for 2016 made finding “strategic cooperation partners” in Japan, South Korea and in the European Union a priority. The comparative profitability of duck also appears to be key: Huaying’s figures for the first half of 2016 show frozen processed duck ranked as its most profitable business in the period, with a gross profit margin of 78% followed by frozen chicken products and meals boasting a 15% profit margin. By contrast its chicks business returned a profit margin of 3.38% and its egg business 0.3%.
Huaying has long had a goal to become China’s first international duck brand and in its marketing has stressed the health attributes of duck over other meats. To boost its international chances it has been investing in training, setting up an online ‘Huaying University’ for staff with modules on finance, marketing and human resources. Huaying wants to “become a more efficient enterprise”, notes the home page of the training portal.