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Yurun Food sells two subsidiaries for $88m

(chinadaily.com.cn) Updated: 2014-12-15 15:19

Yurun Food Group, a Hong Kong-listed meat product manufacturer, sold two subsidiaries for 545 million yuan ($88 millon) on Friday as it battles food security scandal.

Some of the company's products failed to pass the spot-check by China Food and Drug Administration (CFDA), as germs were detected in them, under the National food safety standard, which was officially implemented in July this year, according to China Business News on Monday.

Yurui Food Group also faced a decline in revenue, as its turnover shrunk from HK$32.32 billion?in 2011 to HK$21.44 billion in 2013. In the first half of 2014, its business volume dropped 12.2 percent to HK$9.04 billion.

On Dec 12, it sold two subsidiaries in Nanjing and Shenyang, raising 545 million yuan in working capital.

Yurun said the reason why it was selling the subsidiaries was because the two companies were inefficient and had relatively outdated production facilities that can be replaced by the new factory it owns nearby.

Its chairman Zhu Yicai resigned in 2012.

Yurun Food Group is also facing challenges from Shuanghui Group in low-temperature meat market, as Shuanghui, focused on the same market, plans to double its sales from two million tons to four million tons, said China Business News citing a senior executive of the company.

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