China National Cereals, Oils & Foodstuffs Import & Export Corp (Cofco) has embarked on restructuring, with a significant asset injection into its SAR-listed subsidiaries. The mainland's state-owned food-trading conglomerate initially planned to transfer most of its assets to its wholly owned, unlisted Hong Kong window company, Cofco (Hong Kong) - formerly known as Top Glory Holding. Company officials said the asset and transaction values had yet to be worked out. The group's total assets were valued at US$4.5 billion by the end of 1998. President Liu Fuchun said Cofco's net profit was US$100 million last year on turnover of US$12 billion. The assets under consideration include property and hotel interests, food and beverage manufacturing, and shipping and investment. Cofco will only retain rights to bulk trade in wheat, maize and rice. Beijing has approved the proposal in principle and it is believed as part of a move to separate the government from business. Cofco chairman Zhou Mingchen said the restructuring aims to enhance the group's competitiveness and raise efficiency. Cofco (Hong Kong) plans to inject the transferred assets into its 50.5 per cent-held subsidiary Top Glory International Holdings (TGI) and TGI's 51.1 per cent-owned China Foods Holdings over the next two to three years. Both TGI and China Foods are SAR-listed red chips. Cofco's property and hotel interests, which might be injected into TGI, include Beijing Cofco Plaza, an office-cum-shopping complex in Beijing and Gloria Plaza hotels in Harbin, Qingdao, Suzhou and Nanchang. Other property interests include Yalong Bay National Resort in Hainan, a hotel-cum-office building in Shenzhen and residential developments in Beijing, Guangzhou and Shenzhen. The food and beverage interests which might be injected into China Foods include refined-edible oil plants, flour mills, three wineries and Coca-Cola bottling plants in the mainland's 13 major cities. Mr Zhou said TGI would undertake expansion in the property and hotel projects, while China Foods would oversee the food and beverage business. Analysts said the Cofco-owned hotels mainly target domestic consumers and no track records of their performance were available although the industry was performing well. They said Cofco's property interests might benefit from the state policy to stimulate domestic demand by encouraging residential property development. The injection of the food and beverage operation, they said, should be a positive move for China Foods and the unified procurement procedure afterwards should result in cost savings.