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BFC pens manufacturing and distribution agreement for China

April 5, 2016 • News

Beston Global Food Company (BFC) has inked an agreement with China’s Hondo Agricultural Company for the production, marketing and distribution of its range of allergen free, ready-to-eat meat meals in China.

Image credit: www.bestonglobalfoods.com.au

Image credit: www.bestonglobalfoods.com.au

BFC Chairman, Dr Roger Sexton, described the Manufacturing and Distribution Agreement with Hondo as an “important stepping stone” for BFC in establishing a robust presence in the Chinese consumer markets.

“Notwithstanding the ChAFTA Free Trade Agreement, Australia is not permitted, under Chinese import regulations, to export processed meat products to China,” he said.

“We have been working with Hondo for some time, together with Chinese and Australian authorities, to find a way of taking our “no numbers” (i.e. no preservatives, no colourings, no additives) range of meat products in the BFC portfolio to consumers in China who are increasingly looking for healthy, nutritious, high protein foods for their families.”

Mr Sean Ebert, the CEO of BFC, said the ready-to-eat meals will be sold to the retail and food service sector in China under the “Yarra Valley Wholesale Meat” brand owned by BFC investee company, Scorpio Foods.

He said the agreement with Hondo would enable Scorpio to export frozen boned out meat to China for transformation into ready-to-eat meat meals in Hondo’s existing facilities in Henan province. According to him, Scorpio will provide the recipes for the meals under a proposed license to Hondo.

“The proprietary sauces and other key natural ingredients in the meals will be supplied by Scorpio to Hondo for manufacturing of the final products under technical and QA supervision by Scorpio,” Mr Ebert said.

The terms of the proposed Licensing Agreement will see Scorpio earn a royalty on its intellectual property in addition to earning revenues on its sale of raw materials and fees for services rendered. BFC said it will provide Chinese consumers with product provenance and anti-counterfeiting verification of the products with its patent pending OZIRIS and Brandlok technologies.

According to the ASX release by BFC, Hondo will market and distribute the products through its existing distribution network and established customer base. The Chinese company is targeting to manufacture and distribute 15,000 tonnes of Scorpio’s “Yarra Valley” products in the first full year of operations and 20,000 tonnes on the second year.

The Hondo Agricultural Company is one of the largest meat processors in China and was one of the first companies in China to import live cattle from Australia. Hondo’s parent company, Chongqing Agricultural Products Co. Ltd is a leading agribusiness company in China and has ownership structure based around farm cooperatives in South Western China.

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