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Impressive Growth in DaChan’s Processed Foods Business


Hong Kong, 25 March 2011 – As the leading chicken meat products supplier in China, DaChan Food ( Asia) Limited (“DaChan Food” or the “Company”, Stock Code: 3999) has announced its annual results for the year ended 31 December 2010. In the face of the difficult operating environment during the year under review, DaChan Food successfully implemented a series of measures to achieve steady improvement in the Company’s overall results. The performance of the processed foods business was particularly outstanding, recording a significant increase in turnover of 57% year-on-year and becoming one of the most important sources of income for DaChan Food.

During the reporting period, the sales income of DaChan Food increased by 1 2.6 % compared with the corresponding period of the previous year, amounting to RMB9.55 billion. Gross profit also increased year-on-year from RMB600 million to RMB660 million. Profit attributable to equity shareholder s of the Company amounted to RMB110 million, representing a growth of 1.2% when compared to the corresponding period of the previous year.

Among all businesses of the Company, the performance of the processed foods business was the most impressive. As a result of accelerating domestic urbanization and the spending power of Chinese consumers becoming more robust, combined with the driving force of the Company’s enhanced product portfolio, diversified sales channels and brand promotion activities, the processed foods business realized a turnover of approximately RMB1 billion for the year under review and a gross profit of approximately RMB120 million, a significant rise of 38.2% year-on-year. Moreover, with mainland consumers becoming increasingly concerned about food safety the “Sisters’ Kitchen” brand of DaChan Food and its complementary product-safety tracing system was successfully recognized by the consumer market. With the one-stop chain model, DaChan Food ensured the products with high quality and safety, to the point that it became the first choice among consumers who prioritize purchasing brands that offer the highest levels of product safety. During the year under review, DaChan Food also launched its campaign to sell branded chicken meat products in small packages, a move which was very well received in the market. As a result, in 2011, DaChan Food will progressively launch more products of a similar nature that not only provide the Company with higher added value but also better meet the consumer market’s evolving demands. Finally, DaChan Food continued to attach high importance to the development of the processed foods business in specialized markets, such as catering, factories and schools, during the year under review and achieved rapid growth.

Through enhanced marketing activities, the diversification of the product portfolio and the expansion of the customer base, the chicken meat business of DaChan Food recorded a turnover of RMB4.53 billion, an 11.6% increase compared with the corresponding period of the previous year. Gross profit also increased significantly year-on-year by 75%. In addition, the feeds business maintained steady growth through the optimization of sales channels and the strengthening of operations pertaining to core products. The turnover of this business increased by 6.5% when compared with the corresponding period of the previous year, amounting to RMB4.07 billion.

In order to enhance R&D efforts and provide customers with more higher value-added products in line with their changing needs, as well as to differentiate the Company from other industry players and increase competitive advantages, DaChan Food established two research institutes during the year under review for the focused research and development of high-tech functional feeds and higher value-added food products, respectively. At the same time, DaChan Food launched the “DaChan Leadership Institute” to enhance staff training and education, create an environment that further facilitates learning, raise the overall quality and competitiveness of team members, and optimize organizational and operational efficiency.

Han Jia-Hwan, the Chairman of the Board of DaChan Food said: “Despite the difficult operating environment that DaChan Food faced in 2010, we successfully improved operating conditions and achieved satisfactory results through the implementation of a series of measures. Looking ahead, with the Chinese economy continuing to grow, leading to accelerated urbanization and enhanced spending power, China’s chicken meat market will meet a precious and thriving development opportunity. To sure-handedly grasp this opportunity, the Company will continue to build up our brand by consistently offering high quality and safe food, strengthen cooperation with retailers, and expand the overall influence of the brand. Meanwhile, we will aim to further optimize the feed and processed food product portfolios, increase focused R&D efforts, and raise the proportion of higher value-added products in the product mix, all to further solidify our market-leading position.”


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