It said this week that two of its wholly-owned units, Anhui Furun Meat Processing and Nanjing Yurun Food Co, have entered into separate agreements to buy the entire interests of the couple in six separate companies.

The company has agreed to pay CNY191.62 million (€19m) for the assets, according to the statement on the Hong Kong stock exchange.

"The acquisitions are consistent with the group's development strategy to expand its production scale," executive director Zhang Yuanfei told XFN-Asia.

Nanjing-based Yurun Food is one of China's largest meat processors but has seen declining sales in the first half of this year alongside falling pig prices. Sales for the first six months were down 5.2 per cent to CNY2.081 billion compared with the same period of last year.

Net profit has however increased 48.6 per cent to CNY254 million, attributed to a decrease in management cost.

An official from the company told AP-Foodtechnology.com that before this purchase, Yurun Food only had management control of the six meat product companies but the land and factory buildings were owned by Zhu Yicai and his wife.

"This land which used to be used for meat production will be used to build slaughterhouses," he said.

"As for the exact production capability and profit that will be yielded from these, I cannot estimate now, because the detailed plan for the construction hasn't been worked out yet."

The company has previously said it wants to build up slaughter capacity to nearly 16 million by 2007.Additional reporting by Pan Yan