Shineway Industry Group Co, China's biggest meat processor, said it will spend almost 3 billion yuan (US$439 million) on acquisitions and expansion this year as the financial stifles affect operations of smaller rivals.

The investment, 50 percent more than last year's, will be used to build or acquire slaughterhouses and meat-processing plants, said Chairman Wan Long yesterday. "The financial crisis is a great opportunity."

China's consumer spending grew at the slowest pace in two years as economic expansion slowed to a seven-year low and 20 million rural migrant workers lost their jobs. Still, Premier Wen Jiabao said the country's 8 percent growth target is achievable with the 4-trillion-yuan stimulus package.

"I'm confident" that the stimulus policies will work and the demand of 1.3 billion people for meat is still "huge," Wan said. There will be a decline in meat consumption in cities as workers return to the countryside but "overall it won't decline by much," he said.

The cheaper price of pork, which has plunged by about 40 percent from a record high last year, should spur consumption again, Wan said. The number of pigs slaughtered in China last year rose 7.6 percent from a year ago to 608 million head, while stocks as of December had increased 5.2 percent from a year ago to 463 million, data from the Ministry of Agriculture showed.

Shineway, which is about 70 percent owned by Goldman Sachs Group Inc, and rival China Yurun Food Group Co are expanding as consumers are encouraged to buy meat in supermarkets instead of traditional wet markets because of food-safety concerns. China Yurun in November said it plans to double capacity over the next two years.

Shineway's full-year profit may rise by 52 percent to 3.2 billion yuan this year because of lower water, electricity and gas costs while sales may grow to 40 billion yuan from 35 billion yuan last year, Wan said. The company's sales may jump to 50 billion yuan in 2010, he said.

The company will sell 3 million tons of meat products this year, compared with 2.5 million last year.

"Our sector has endured all sorts of hardships," including blue ear disease and record pork prices in 2007-08, he said. The current financial crisis "isn't the worst."

(Shanghai Daily March 13, 2009)