MARFRIG GROUP ANNOUNCES INVESTMENT IN CHINA

Exploring opportunities to supply food and meet the growing demand for distribution in the Chinese market,  Marfrig Group announces today two the formation of  joint ventures in China with COFCO and Chinwiz , both through its subsidiary Keystone Foods China.

COFCO, founded in 1949, is the China’s largest food producer and a leading group in the area of grain, oil and food imports and exports. The joint venture, named COFCO Keystone Foods Supply Chain (China) Investment Company, was established to explore business opportunities in logistics and food distribution in China. The project, with operations projected to start in 2012, provides for the construction of 6 distribution centers, transportation fleets and information-support technological platforms in strategic cities, including Beijing and Shenzhen, (where is located Keystone’s processed plant in China), besides Chengdu, Shanghai, Shenyang and Wuhan. The joint venture will have about 45% Keystone - 55% and COFCO will have about five thousand employees.

Chinwhiz is a private company that has been located in Weifang in the province of Shandong since 2004. Its core activities are: feed production and chicken production/slaughter, with over 90 subsidiaries (including companies and farms). The joint venture, named Keystone-Chinwhiz Poultry Vertical Integration, have the objective of implementing a vertical integration in poultry operations in China and meeting the needs of its principal client for processed food, high quality and competitive costs. The JV will initially have capacity to process 200,000 birds/day and will be able to supply 50% of the raw material needs of Keystone's processing unit in China. The unit already serves over 2,600 restaurants in China, Hong Kong and Japan. The joint venture will have about 60% Keystone - 40% Chinwhiz and will have about six thousand employees.

With these investments, Marfrig will be strategically positioned to meet the growing demand for food in the Chinese market, with operations that range from processing to distribution to clients. The investment is also consistent with the Company’s strategy of focusing on its financial sustainability over the long term, which will contribute to consistent cash generation.