Japan's Starzen, Mitsui to set up food business unit in China
TOKYO,NNA - Japanese meat processor Starzen Co. and major trading house Mitsui & Co. will form a joint venture in China to capitalize on growing local demand for imported beef.
The two firms plan to establish San Chuang Enterprise (ShenZhen) Ltd. for the processing and sale of meat and seafood in the southern city of Shenzhen in conjunction with a local trader, starting operations in September and initially dealing mainly in Australian beef, a Mitsui spokeswoman told NNA on Friday.
The move is part of a global alliance between the two Japanese firms to bolster their meat trading and processing businesses, tapping the world's largest importer of livestock and fishery products on the back of the growing middle class and rising local demand for high-quality protein, the companies said in a statement released on Thursday.
Capitalized at 30 million yuan ($4.4 million), the local unit is owned 55 percent by Mitsui, 25 percent by Starzen and the remaining 20 percent by the Chinese partner, the statement said.
The joint venture expects to predominantly ship Australian beef on which lower import duties are imposed as compared to American beef, the spokeswoman said.
It plans to enhance its product lineup to include tuna, shrimp and salmon farmed by the Mitsui group in Chile, Japan and Vietnam, she said.
It also utilizes Starzen's global meat procurement network and clients as well as existing clients of the local partner such as restaurants and supermarkets in China to sell Japanese “sake” rice wine alongside food products, she added.
The local arm expects to post 3 billion yen ($28 million) in sales for the first year from September, mainly focusing on the southern province of Guangdong where purchasing power is high, and reaching out to inner provinces and Hong Kong later to boost sales to 15 billion yen in four years, according to the spokeswoman.
The two Japanese firms formed a business partnership in 2010 and a capital alliance in 2016. Mitsui is Starzen's largest shareholder, according to the latter's financial statements. (NNA/Kyodo)