Wen's Foodstuff (Wen's), the largest pig integration in China, posted strong profits in the first quarter of 2019. The company's net profit increased by 50,8% during this period. The pig company experiences that the Chinese consumer is switching from pork to poultry meat.
Wen's was able to benefit from an extremely good demand for poultry meat in the first half of the year. As a result, net profit rose from 917,3 million yuan (€117 million) to 1,38 billion yuan (€176 million). Turnover in the first 6 months of the year increased by 20,2% to more than 30 billion yuan, which is approximately €3,8 billion.
The strong growth figures in the poultry sector are mainly caused by the fact that pork currently has a negative image in China. This is a result of the outbreaks of African swine fever. As a result, consumers are looking for replacement proteins, such as chicken and duck. The disease also means that pork stocks have fallen sharply. However, sales volumes are still 13,7% higher than last year during this period, when Wen's issued a profit warning.
Further growth expected
Pig integration said in a statement that broiler sales volumes increased by 17,5% in the first half of the year, while duck sales increased by approximately 21,5%. "Poultry sales have boosted profits within the company, even when pig prices were under pressure," the company writes.
Due to the outbreaks of African swine fever, Wen's expects duck and poultry production to increase significantly this year. The group is responding to this by further expanding broiler production and making various acquisitions.
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