China soybean crusher Sunrise files for bankruptcy after debts pile up

BEIJING, July 23 (Reuters) – Chinese soybean crusher Shandong Sunrise Group has filed for bankruptcy after failing to repay its debts, according to a court filing, highlighting the problems facing the sector from shrinking demand for animal feed and tight credit.

The company, once one of the country’s largest soybean importers, registered the bankruptcy on Friday with a court in the county of Juxian in Shandong province, according to a filing on a website run by China’s Supreme Court.

Shandong Sunrise, which is run by Shao Zhongyi, China’s 230th richest man according to Forbes’ 2016 rich list and his brother, did not answer calls for comment. It is headquartered in Rizhao, China’s major crushing hub in eastern Shandong province.

The bankruptcy follows falling demand for animal feed after pig farmers in China, the world’s biggest pork consumer, began culling their herds because of falling meat prices. Crushing companies reduce soybean seeds to both oil and meal.

Crushers in Shandong <JCI-SBMG-SHDNI> are losing almost 50 yuan ($7.40) per tonne of soybeans they process, according to consultancy Shanghai JC Intelligence.

China’s vast farm sector is also facing uncertainty as Washington’s trade dispute with Beijing threatens to curb supplies of critical farm goods, including soybeans, and inflate costs.

Shandong Sunrise, also known as Shandong Chenxi Group, accounted for an estimated 12 percent of China’s soybean imports in 2014 but it has shrunk in size in recent years, according to traders. https://reut.rs/2uRwCkQ

The firm recorded sales income of 43.2 billion yuan ($6.39 billion) in 2016, including 26.1 billion yuan from trading, according to its website. It does not give more up-to-date data.

Its oil business was worth 16.85 billion yuan and its crushing division was valued at 1.59 billion. It also used to own independent Chinese refiner, Shandong Haiyou Petrochemical Group.

 

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