On June 17, Sanyuan Group announced that
after deliberation of its board of directors, the company approved a decision
to transfer its 18% equity in Gansu Sanyuan Dairy Co., Ltd. (Gansu Sanyuan) at
a listing price of 1 RMB (USD 0.15). Gansu Sanyuan is 62% owned by Gansu Heihe
Hydropower Industrial Investment Co., Ltd. (Heihe Hydropower), 18% owned by
Sanyuan Group, and Zhangye Modern Agriculture Investment Co., Ltd. holds the
remaining 20% of the shares. According to its 2021 annual report, Sanyuan Group
has invested RMB 18 million (USD 2.7 million) in Gansu Sanyuan.
In 2016, in order to expand and cultivate
new markets and enhance the popularity of the Sanyuan brand in the northwest
market, Sanyuan Group established a joint venture company, Gansu Sanyuan, with
Heihe Hydropower and Zhangye Agricultural Investment in Ganzhou District,
Zhangye City, Gansu Province.
Qixinbao, a Chinese information query tool,
shows that Heihe Hydropower is 90% owned by Ganzhou District Financial Security
Service Center and 10% owned by Gansu Provincial Department of Finance.
Furthermore, Zhangye Agricultural Investment is 52% owned by Zhangye
State-owned Assets Management Office, and CDB Development Fund Co., Ltd. holds
20% of the shares.
Gansu Sanyuan has a registered capital of
RMB 100 million (USD 14.9 million), and Heihe Hydropower contributed 62 RMB
million (USD 9.25 million) in cash, accounting for 62% of the registered capital.
In addition, Zhangye Agricultural Investment invested RMB 20 million (USD 2.98
million) in cash, accounting for 20% of the registered capital. Furthermore,
Sanyuan Co., Ltd. invested RMB 18 million (2.69 million), 18% of the registered
capital.
Gansu Sanyuan constructs new dairy plant
After Gansu Sanyuan was established, the
company began construction on a new dairy processing plant, which was completed
in 2017. The company uses the Sanyuan trademark to produce and sell Sanyuan
brand pasteurized milk, fermented milk, sterilized milk, modulated milk, dairy
beverages, and other dairy products.
At the beginning of 2018, Gansu Sanyuan
built a new processing production line with a daily processing capacity of 500
tons of raw fresh milk and an annual output of 180,000 tons, covering an area
of about 10 hectares, with an estimated total investment of RMB 456.8 million
(USD 68.2 million).
At the time of building its new dairy
processing plant in 2018, Gansu Sanyuan expected to achieve annual sales
revenue of more than RMB 550 million (USD 82.0 million), an annual profit of
RMB 100 million (USD 14.9 million), and the company expected to owe RMB 70
million (USD 10.4 million) in taxes within the first 3 to 5 years of
production. After the company's project is completed and reaches production
standards, the company expects to achieve an annual sales income of more than
RMB 1.2 billion (USD 179 million).
The successful construction of the project
will not only play a role in increasing efficiency and income in the livestock
industry and fresh milk production, but it will also greatly promote the
development of related industries such as logistics.
Sanyuan Group to release Sanyuan dairy
brand after transaction
As of September 30, 2021, Gansu Sanyuan's
total assets were RMB 202 million (USD 30.1 million), and its appraised value
was RMB 224 million (USD 33.4 million). The value of the company's liabilities
is RMB 235 million (USD 35.0 million).
After the completion of this transaction,
Sanyuan Group will no longer hold the equity of Gansu Sanyuan, and it will
release the relevant authorization of the Sanyuan brand.
For more information, please check our Dairy Products China News.