Competition in China’s pork sector hit annual profits at local meat group Zhongpin in 2012.

The US-listed firm reported a 31% fall in net income to US$44.1m for last year. Zhongpin said its costs rose amid higher sales volumes and “intense competitive pressure” in the sector due to “ongoing industry consolidation”.

The increase in volumes helped revenue, which rose 13% to $1.64bn, although the products were sold, on average, at a lower price, which affected margins.

Chairman and CEO Xianfu Zhu, who plans to take the firm private this year, forecast margins would fall in 2013 as competition intensifies and costs increase.

“We anticipate that our net profit margin in 2013 will decrease due to increased competition in the industry, the expected increase in labor cost and overheads, and the expected increase in quality assurance and control costs in response to increased importance on food safety placed by the government and consumers,” he said.

Zhongpin is expected to go private in the second quarter of the year.