Losses widen among large-scale slaughter and meat processing enterprises nationwide

The latest data obtained by our reporter from the China Meat Association shows that as of the end of 2014, among the 3,786 above-scale slaughter and meat processing enterprises nationwide, 351 were loss-making, accounting for 9.3%, and the industry loss rate further widened from 8.91% in 2013.

Among them, the livestock slaughter industry had 137 loss-making enterprises, up 12.3% year on year; the poultry slaughter industry had 94 loss-making enterprises, up 18.9% year on year; the meat products and by-products processing industry had 120 loss-making enterprises, down 2.4% year on year.

In terms of losses, livestock slaughter enterprises lost 1.347 billion yuan, up 70% year on year; poultry slaughter enterprises lost 1.105 billion yuan, down 10% year on year; meat products and by-products processing enterprises lost 900 million yuan, up 24.8% year on year.

Li Shuilong, vice chairman of the World Meat Organization and executive chairman of the China Meat Association, believes the main reason for the decline in profits and the relatively large number of loss-making enterprises in the slaughter industry in 2014 was low capacity utilization. "Above-scale enterprises account for only about 20% of the industry, while the remaining 80% are all small and micro enterprises, so they compete with each other for raw materials, causing advanced capacity to sit idle and creating a structural imbalance in the industry."

In addition, low processing efficiency is also one of the reasons. Li Shuilong explained that, looking at above-scale slaughter and meat processing enterprises as a whole, the profit margin on main business revenue was 4.7%, 1.6 percentage points lower than the average level of the agricultural product processing industry.

According to the national statistical communique, China's total meat output in 2014 was 87.07 million tons, up 2% from the previous year. By the end of 2014, there were 3,786 above-scale slaughter and meat processing enterprises nationwide, an increase of 93 from the previous year, or 2.5%.

Regarding the recent report that problem pork entered the Dezhou factory of Jinluo Group, Li Shuilong analyzed to our reporter that the meat product processing industry chain is relatively long, and enterprises are the main body responsible for food safety, while the government and society also need to fulfill regulatory and oversight responsibilities. "Government departments must strictly control the source; before and after livestock slaughter enters the factory, enterprises must conduct further inspection and quarantine, and no loophole can exist in any link."

According to a Jinluo Group announcement, on March 23, staff of the Linyi County Animal Husbandry and Veterinary Bureau went to the Dezhou Jinluo factory for on-site acceptance inspection, and the acceptance result was qualified. The Linyi County Animal Husbandry and Veterinary Bureau issued a reply agreeing to the resumption of production at the Dezhou Jinluo factory.

Jinluo Group later summarized: before slaughter, three checks - "factory entry inspection," "unloading inspection," and "pre-slaughter inspection" - ensure that the pigs are qualified; during slaughter, control and quarantine inspection are strictly enforced, and the slaughter process fully implements the quarantine inspection procedures prescribed by the state to ensure process safety; at factory exit, the quarantine inspection check is properly handled, and through self-inspection and self-control and qualification by the competent department's quarantine, the products sold are ensured to be safe and qualified. From pigs entering the factory to slaughter and processing, more than 20 quarantine inspection procedures must be passed, and only if every one is qualified can they leave the factory.