Yuhe International Inc. (OTCBB: YUII)
Written by John Pentony on July 10, 2009
Founded in 1996, Yuhe International is the second largest day-old broiler supplier in China. The Company was listed through a share exchange agreement between Bright Stand International limited, the parent company of Weifang Yuhe Poultry Co. and First Growth Investors, Inc. on March 12, 2008. Subsequent to this, First Growth Investors, Inc. was renamed Yuhe International Inc. The Company’s main operations involve breeding, as all broilers are sold within a day of hatching. With headquarters in Weifang, Shandong province, the Company has two operational subsidiaries, Weifang Yuhe Poultry Co. Ltd. and Weifang Taihong Feed Co. Ltd., the latter of which largely supplies the Company’s internal demand for chicken feed. Currently, over 85% of the Company’s sales are in Shandong province with a customer base of 27 local agents. The Company has imported state of the art equipment from the United States, Germany and Japan and has passed ISO9001 certification, allowing it to adhere to international standards of operation.
At Yuhe International, The Company aims to be the dominant supplier for day old breeders. The Company intends to adopt the following growth strategy to support the increasing poultry industry in China.
- Increase sales in existing markets: As the demand for day old broilers continues to increase with current demand outstripping supply, Yuhe expects to increase sales within its existing customer base. As of December 31, 2008, revenue generated by sales reaches $36.1 million and it is expected to increase to $50.0 million by the end of 2009
- Expand facilities: At present, there are 13 breeder farms. For the remainder of 2009, the Company intends to begin construction on two new breeder farms and complete construction of a third hatchery facility
- Focus on high quality day old broilers: Throughout its planned expansion, Yuhe intends to maintain rigorous quality control measures while increasing output. This includes continuing to use the highest quality imported equipment and stringent quarantine and vaccination requirements for all birds. In this way, Yuhe expects to maintain a price premium over competitors of 10% to 15% and continue building brand equity.
- Integrate into downstream business: Aside from consolidating and increasing market share in the day old broiler market, Yuhe is looking into the possibility of expanding its business activities into new market segments. More specifically, Yuhe aims to leverage its experience in the poultry raising industry to move into downstream operation activities such as meat processing.
Yuhe currently has thirteen separate breeding farm sites that are separated approximately five miles from each other. All breeding facilities have controlled and filtered air and water supplies to eliminate contact with outside animals and feature advanced imported equipment such as Big Dutchman plate-feeding systems and lubing nipple drinking systems from Germany, a centralized temperature control system from the U.S and an intelligent alley incubation system from Japan. The Company also maintains tight control over temperature and humidity conditions, ensuring optimal hatching conditions and increasing yields by up to three percent.
THE MANAGEMENT TEAM
Mr. Zhentao Gao, chief executive officer
Mr. Gao has over 17 years of experience in the chicken breeding industry. He started Weifang Yuhe Poultry Co. Ltd. in 1996 with a capacity of roughly 3,000 parent breeders. Mr. Gao’s strong leadership and entrepreneurship have played a vital role in enabling the Company’s to achieve a 30% to 40% average growth rate. Gao holds a bachelor degree from Beijing Humanities College.
Mr. Gang Hu, chief financial officer
Mr. Hu joined Yuhe International Inc. in June 2008 as CFO. Prior to joining Yuhe, Mr. Hu served as the chief financial officer of Sino-Gas International Holding Inc. from October 2007 to March 2008. Prior to that, he was the finance director of FedEx Kinko’s Greater China operations from August 2004 to October 2007. He obtained his Bachelor degree in economics from Shanghai University of Finance and Economics.
Mr. Wengui Ding, chief technology officer
Mr. Ding joined Yuhe as the Company’s chief technology officer in July 2005. Prior to joining Yuhe, Ding served as site manager for over 10 years at Qingdao Zhengda, a poultry company. He is an expert in animal husbandry science and the leader of system development and control programs for the Company. Ding is a graduate of Heilongjiang Agriculture University.
Mr. Jinhua Zhang, board secretary
Mr. Zhang serves as the board sectary in Yuhe. He is also the manager for the Company’s planning department. Prior to joining Yuhe, Zhang worked for American Lorain Corp. for several years, playing a pivotal role in the company’s public listing process. Mr. Zhang joined Yuhe International Inc. in 2007 and is a graduate of Shandong Light Industry College with a degree in business management.
Company Contact:
Mr. Jinhua Zhang, Board Secretary Yuhe International Inc. 301 Hailong Street, Hanting District, Weifang, Shandong Province, China Phone: +86-536-736-3688 Email: zhangjinhua1688@126.com
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