Under the agreement, $35 million will be invested toward establishing grandparent farm and hatchery facilities in the city of Suizhou in Hubei province, west of Shanghai, to start producing parent stock early in 2015. Cobb will own an 85 percent share in the joint venture company, officially named Hubei Tong Xing Cobb Breeding Company. Tong Xing will own the other 15 percent. The company will have an initial production target of five-million parents a year.
Jerry Moye, president of Cobb-Vantress, said China's poultry industry is showing signs of maturity and a growing awareness of food safety. Also, international foodservice providers are looking for more rigorous supply chains and companies with the right poultry genetics.
“Tong Xing has been one of our customers for the past four years and we’re excited at this opportunity to work closer together in this joint venture,” Moye said. “They are located in an area of China with a low chicken population, yet it’s very accessible with good transport links.
“This represents a very significant step forward for Cobb to get a foot on the ground in China,” he added. “Our strategy has been to develop relationships with our customers directly in the major world markets like the US, Brazil and European Union. The time is right to enter China. We believe that in conjunction with our existing partner BPBC located in the north near Beijing, Cobb will be in a great position to build up volume across the country.”
