Tech-Bank aims to achieve break-even in its food processing and pig slaughtering division by 2025. The company is focused on maximizing production capacity, expanding distribution channels, and leveraging Asia’s largest slaughter facility in Linquan. Financial improvements from restructuring, regional production optimization, and cost reductions will support its path toward operational stability and growth.
Tech-Bank Food Co., LTD., currently in pre-restructuring, updated its food processing division at its Q3 2024 briefing, projecting break-even by 2025. Leveraging operational efficiencies in farming and expanding its distribution reach, the company anticipates a sustainable growth trajectory in the food segment.
Optimizing Capacity and Quality Standards
According to AgriPost, Tech-Bank has maintained production with its swine herds to ensure consistent quality and branding despite financial constraints limiting capacity at its slaughterhouses. Operations in Anhui, Hubei, and Zhejiang have been underutilized, but planned restructuring is expected to ease these limitations and boost cash flow, ultimately enhancing productivity through economies of scale.
Broader Market Reach through Expanded Distribution Channels
Tech-Bank is strengthening its distribution focus across B2B and B2C markets. B2B efforts target partnerships with restaurant chains, institutional catering, and food processing firms, while B2C aims to expand sales through distributors, supermarkets, fresh food markets, and online platforms.
Operational Scale and Growth
According to AgriPost, the company’s large-scale slaughtering complex in Linquan, Anhui—one of Asia’s largest—has a processing capacity of 5 million pigs annually. In the first three quarters of 2024, Tech-Bank processed 1.13 million pigs, up 20% year-over-year, and sold 4.5 million pigs (1.5 million piglets and 3 million fattened pigs).
Financial Snapshot and Food Processing Performance
Revenue for the first three quarters of 2024 reached CNY 7.146 billion (about USD 978.6 million), with a net profit of CNY 1.341 billion (about USD 183.7 million). The company’s non-recurring gains included investment gains of CNY 995 million from the transfer of equity in its participating subsidiary, SciGene, and debt restructuring gains of CNY 143 million. The food processing division posted CNY 2.4 billion (about USD 328.4 million) in revenue, though it saw a loss of approximately CNY 46 million (about USD 6.3 million).
Investor Interest and Restructuring Plan
Five industry and two financial investors have expressed interest in Tech-Bank’s restructuring. Due diligence is in progress, with a proposal expected by mid-November. Following regulatory approval, the restructuring is expected to advance to a formal stage.
Production and Efficiency Targets for 2025
Tech-Bank reaffirmed its 2024 target of 6 million hog sales, with 2025 goals at 6-7 million, including 4-4.5 million fattened pigs and 2-2.5 million piglets. Breeding sow inventory reached 250,000 by the end of Q3 and is expected to reach 260,000 by year-end. Future capital expenditure plans will focus on biosecurity and environmental safeguards rather than capacity increases.
In Q3, Tech-Bank reduced fattening costs to CNY 14.92 (about USD 2.05) per kilogram, with further reductions anticipated. Lower feed prices contributed 38% of cost improvements, while efficiency gains drove the remainder. While financial constraints continue to impact capacity utilization, the company aims to further reduce fattening costs to CNY 13.5 (about USD 1.85) by 2025.
Regional Capacity Adjustments
Tech-Bank’s operational shifts include a 34-unit reduction in Shandong fattening facilities and an increase in Guangxi and Guangdong outputs, now representing 24% of production. Plans aim to boost this share to 40%.
Debt Management and Operational Stability
Tech-Bank reported a significant reduction in liabilities by Q3, bringing its debt-to-asset ratio to 73.86%, down 12.87 points since the start of 2024. The company has met all obligations to employees and contract farmers, affirming stable operations.
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