Meihua Bio to deregister Langfang Meihua 12-03-2015

Meihua Bio announced to deregister a wholly-owned subsidiary Langfang Meihua for internal resource integration, CCM reported.

 

 

On 26 Oct., 2015, Meihua Holdings Group Co., Ltd. (Meihua Bio) made an announcement that it decided to deregister a wholly-owned subsidiary - Langfang Meihua Bio-Technology Co., Ltd. (Langfang Meihua). This move is aiming to further integrate internal resources, improve cash flow and reduce management costs. As the Langfang Meihua’s businesses have been gradually narrowed down, the deregistration of Langfang Meihua will exert no impact on the development of Meihua Bio overall.


Accordingly, after Langfang Meihua to be deregistered, its domestic business is charged by Meihua Bio and its export business is transferred to Meihua Group International Trading (Hong Kong) Limited (Hong Kong Meihua), a wholly-owned subsidiary of Langfang Meihua. At the same time, Meihua Bio acquired 100% of shares in Hong Kong Meihua from Langfang Meihua. Subsequently, Hong Kong Meihua will be changed from Grandson Company to 100% subsidiary of Meihua Bio.

 

Financial data of Langfang Meihua and Meihua Bio, Q1-Q3 2015

 

Item

Langfang Meihua

Meihua Bio

As of 30 Sept., 2015, million USD

Total assets

115.91

2,952.33

Total liabilities

0.5

1,604.16

Net assets

115.43

1,311.85

Item

Q1-Q3 2015, million USD

Revenue

2.38

1,396.57

Cost of sales

2.84

1,335.33

Net profit

-0.1

60.73

 

Source: Meihua Holdings Group Co., Ltd.

 


Background of Langfang Meihua



Langfang Meihua is the earliest production base established by Meihua Bio. Its main businesses include monosodium glutamate (MSG), modified starch, compound fertilizer. Since 2009, its business scale has been narrowed. An announcement issued by Standing Committee of the people's Congress of Langfang City on 7 Aug., 2014 showed that the export value of Langfang Meihua’s MSG in H1 2014 decreased by 87.2% YoY. Later, Meihua Bio constructed factories in Inner Mongolia Autonomous Region, Xinjiang Uygur Autonomous Region, signifying that Meihua Bio’s business and production transferred to Northwest China.


 


On 18 April, 2013, Meihua Bio passed the proposal of site relocation and technology upgrading projects. Accordingly, the


fact that a continual rise in the prices of local raw material and coal made production cost high and weakened Langfang Meihua’s competitiveness, the company decided to relocate a 100,000 t/a MSG production line to Arun Banner, Hulun Buir City, Inner Mongolia Autonomous Region. The fixed-assets of Langfang Meihua was valued at USD79.17 million (RMB500 million). Meihua Bio has completed the relocation in H1 2015. Subsequently, Meihua Bio deregistered Langfang Meihua.

After relocation, there are two subsidiaries in Langfang City, Hebei Province. Langfang Meihua Flavoring Foods Co., Ltd. is a completely automatic base for seasoning packaging.

  • Langfang Meihua Bio-Technology Development Co., Ltd. is specialized in biotechnology development, technical transfer, technical services and technical analysis and testing.

Relocation of Langfang Meihua

Source: Meihua Holdings Group Co., Ltd.

 

CCM analyzed that Xinjiang, with vast area and small population, is a suitable place for amino acid enterprises relocation and reorganization. Upon the implementation of national west development strategy, local government provides policy support for enterprises, such as low corporate income tax rate.

 

Corporate income tax rate of Meihua Bio and its subsidiaries


Company

Corporate income tax rate

Meihua Holdings Group Co., Ltd.

15%

Xinjiang Meihua Amino acid Co., Ltd.

15%

Langfang Meihua Bio-Technology Co., Ltd.

25%

Langfang Meihua Flavoring Foods Co., Ltd.

25%

Langfang Meihua Bio-Technology Development Co., Ltd.

25%

Langfang Meihua Bio-Technology Co., Ltd.

15%

Tongliao Jianlong Acid Co., Ltd.

25%

Tongliao Lvnong Biochemical Engineering Co., Ltd.

25%

Tongliao Tongde Starch Co. Ltd.

25%

Meihua Group (Emin) Amino Acid Co., Ltd.

25%

Meihua Group International Trading (Hong Kong) Limited

16.5%

Lhasa Meihua Biological Investment Holdings Co., Ltd.

15%

Dalian Hissen Bio-pharm. Co., Ltd 

15%

Shanxi Guangsheng Medicine Package Co., Ltd.

25%

Shanxi Guangsheng Medicinal Capsule Co., Ltd.

25%

Source: Meihua Holdings Group Co., Ltd.
 
If you want to know more the MSG industry, you can have a look at one of our product: Corn Product China News.
 

About CCM:

CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets. Founded in 2001, CCM offers a range of data and content solutions, from price and trade data to industry newsletters and customized market research reports. Our clients include Monsanto, DuPont, Shell, Bayer, and Syngenta. CCM is a brand of Kcomber Inc.

 

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TagMeihua Biomonosodium glutamate


 

 

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