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China: Cofco sells off its unused capacity

09/03/2018

Press release
COFCO Tunhe Tomato Co., Ltd.
China,
PacificAsia
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A few weeks ago, the specialized press reported that Cofco is undergoing a new restructuring of its industrial processing capacity and equipment. According to sources close to the transactions, China’s n°1 tomato processing company has already sold some of its manufacturing plants, a measure that has been requested by the “State-owned Assets Supervision and Administration Commission of China”.

Under the requirement of the Commission, “COFCO TUNHE must clean up idle and inefficient assets”. Nine factories have been listed for sale, including six tomato aseptic processing factories, two apricot processing factories and one repack factory. So far, two transactions have been concluded.
 
“All these factories have been closed down for many years, and local raw material supply is not enough to restart efficiently. There is no impact on the effective tomato capacity of COFCO TUNHE. And actually, COFCO TUNHE will get stronger with the remaining high efficient capacity of about 400 000 tonnes of tomato paste per year relying on more guaranteed and sustainable raw material supply. Most of the buyers or potential buyers of these factories mainly aim to obtain the land and premises to build other businesses instead of restarting tomato processing, which will not bring much negative impact on the tomato industry structure in China,” explained a representative of Cofco. 

COFCO TUNHE Tomato Co., LTD. is now undergoing a mixed ownership reform. On the premise of COFCO as the main shareholder, non-state-owned capital will be introduced into the company, the systems and equipment will be optimized, the efficiency of management will be improved, employees will become more motivated, the ability of resisting external hazards will be strengthened. All of these measures will make the company more confident to face market challenges thanks to stronger core competitiveness and a more market-oriented approach.

Source: Cofco