Japanese conglomerate Mitsui & Co. has joined forces with local meat business Starzen and Chinese company Takugen International Trade to form a new meat and fish joint venture in China.
Mitsui and Starzen – a meat processor and distributor in which Mitsui has a stake – are aiming to tap into increasing demand for meat and fish from Chinese consumers through the joint venture company Sanso Trading Co., which will be based in Shenzhen in Guangdong Province.
In a statement Mitsui said: “China is one of the world’s leading meat importers. Demand for imported meat is expected to continue to grow in the future, as there is a limit to supply by domestic production while demand is increasing due to population growth. In particular, the import volume of beef has increased sharply in recent years, and this trend is expected to continue.”
It added: “We decided to establish a joint venture company in China aiming to meet the increasing demand for livestock products.”
The new company is expecting to start operations in September with working capital of JPY500m (US$4.6m).
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Mitsui will own 55% of the venture, Starzen 25% and Takugen 20%.
Mitsui and Starzen have linked up in the past. In 2010 they forged an agreement on a business partnership “targeted toward the reinforcement of their value chain for the production, processing, manufacturing, distribution and sale of meat”.
The companies said at the time that their goal for the future was to “build a stronger integrated value chain spanning all stages from production to sales to ensure the reliable supply of superior pork and related products with an emphasis on safety and consumer confidence”.
And in 2016 Mitsui subscribed to a third-party new share allotment carried out by Starzen, buying shares worth JPY4.3bn and taking its stake in the business to 16.39%.
Mitsui said at the time it would work to enhance the corporate value of Starzen by “drawing on its own global network and creating synergy from collaboration with Mitsui & Co. group companies, and also strive to contribute to the development of the meat industry and to stable supply to satisfy increasing demand for meat, through the joint operation of meat business in Japan and overseas”.