(Yicai Global) Aug. 14 -- Chinese agricultural product processer Tangrenshen Group Co. [SHE:002567] will join hands with food chain enterprise Hunan Wenheyou Cultural Industry Development Group Co. (Wenheyou) to jointly found a sausage and prepared food company.

The nascent firm will establish subsidiaries in Beijing, Xiong'an New Area, Guangdong and Shanghai, and will go public within five years, per the plan.

Tangrenshen's wholly-owned subsidiary, Shenzhen Qianhai Tangrenshen Investment Co., and Wenheyou struck a cooperation agreement on Aug. 11 on their jointly-founded Hunan Wenhetang Food Co., with Tangrenshen to hold 40 percent of shares and Wenheyou 60 percent, Tangrenshen said, but without disclosing specific investment amounts.

The new company aspires to create the top sausage and processed food brand in China, and will open sausage stores nationwide and register the Wenhetang trademark on its 29 types of products, including sausages and snacks. The company will set up its regional subsidiaries based on market conditions.

Wenheyou is an emerging food chain operator with its major market in Changsha, in China's south-central Hunan province. It has more than 200 chain stores in the country selling sausages, crayfish and milk, while Tangrenshen's more than 20 years' experience in sausage production confers advantages, as will its entire pig-breeding industrial chain.

This cooperation will bring each party's business strengths into full play, and the focus on siting sausage chain stores in big cities will help the company expand within the meat industry, Tangrenshen said.