TaiMei Purchase Boosts Lamb Weston Operation in China
As part of its ongoing business strategy to grow the company’s international presence, Omaha, Nebraska, USA-headquartered ConAgra Foods, Inc. announced on July 14 that it has acquired TaiMei Potato Industry Limited, a potato processor in Shangdu, Inner Mongolia. The purchase price of $93 million will reportedly not impact the company's previously discussed debt reduction plans in fiscal 2015.
The acquisition expands ConAgra Foods’ Lamb Weston operations in a market that has growing demand for frozen potato products. Lamb Weston makes a variety of frozen potato, sweet potato and other vegetable products for restaurants, other foodservice operators and retailers in more than 100 countries around the world
“We’ve been doing business in China and throughout Asia for more than 25 years, leading the way in market development and expansion,” said Greg Schlafer, president of Lamb Weston. “TaiMei is ConAgra Foods’ first potato processing facility in China, and we are confident they’ll help to accelerate our strong growth in Asia.”
Established in 2010, TaiMei is located in one of the largest potato growing regions in the PRC. The facility provides Lamb Weston with the ability to make frozen potato products closer to its expanding customer base, and meet the feed the rising appetite for frozen potato products in Asia. TaiMei’s approximately 340 employees joined ConAgra Foods Lamb Weston upon the transaction’s closing.
“Our focused expansion in China is truly customer-centric. We’re leveraging our deep industry experience to develop in-country supply capabilities for major quick-service restaurant chains and other strategic customers,” said Gary Rodkin, chief executive officer of ConAgra Foods. “Our customers have aggressive growth plans in China, and by adding ConAgra Foods’ operations in China, we will be better able to support their plans.”
According to the Tai Mei Potato Industry Limited website, the company, formerly a wholly foreign-owned enterprise established on the Chinese mainland by Hong Kong Tai Mei Agriculture Limited, had registered capital of $46 million and represented a total investment of $99 million. Its operations range from processing and marketing french fries, granules, flakes, mashed potatoes, potato cakes, ketchup and other products, in addition to agricultural hi-tech R&D and warehousing services.
TaiMei’s state-of-the-art factory is equipped with processing and packaging equipment from leading Dutch suppliers, among them Kiremko, Tolsma and BluePrint Automation BV (BPA). When its potato production line was installed several years ago, the rapid rate of 10 tons of throughput per hour was said to be “the most sophisticated and powerful production line in China.” Annual capacity for french fry output is 50,000 tons, plus 5,000 tons of flakes. Warehouse capacity for raw materials is 130,000-tons.
TaiMei has worked together with the Institute of Vegetables and Flowers of the Chinese Academy of Agricultural Sciences to guarantee the quality of raw materials for french fries, establish a seed potato breeding base and potato tissue culture room, and conduct joint research on tissue culture, detoxification, virus testing and efficient cultivation. As a result, it can provide high-quality detoxified seed potatoes for its plantation base and contract farmers, and adopt a uniform standard for the field management plantation base and contract farmers.