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May 19, 2022


From aquafeed to food processing: The transformation of Guangdong Hengxing

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Guangdong Hengxing Group is one of the leading aquafeed companies in China and has been the leader of the Chinese shrimp feed market for many years.


The group currently has five subsidiary companies in Guangdong and Hainan provinces. Having started marine farming and fish fry breeding in 2004, Guangdong Hengxing — which has built a whole industry chain around the South American white shrimp — saw sales volume of its shrimp feed reaching 320,000 tonnes in 2012, with a market share as high as 25%.


In the same year, Guangdong Hengxing attempted an initial public offering (IPO) to raise funds for the group's upcoming 915,000-tonne feed project. However, the IPO was rejected by the China Securities Regulatory Commission in 2014.


With little interest in listing thereafter, Guangdong Hengxing focused on transforming itself into a food enterprise. The company's business now covers food processing, food research and development, and modern agriculture.


Agriculture is still Guangdong Hengxing's core business, which comprises aquaculture, pig farming and smart fishery. The group's main cultured species are the South American white shrimp, giant tiger shrimp, kuruma shrimp, golden pomfret, grouper and sea snail.


At present, Guangdong Hengxing has a model aquaculture base (that entails more than 6,000 large-scale deep-water cages), and five aquatic food processing plants (with an annual processing output of over 200,000 tonnes), as well as a large-scale automated pig breeding farm and a commercial pig breeding demonstration base.


Given the rapid growth in domestic consumption, China has turned from being the world's major exporter of shrimp products to a major importer. This prompted Hengxing to acquire Quanlian Jicai, an aquatic product trade platform jointly established by the Aquatic Industry Chamber of Commerce of the National Federation of Industry and Commerce and the Zhanjiang Aquatic Products Circulation and Processing Association. After more than two years of development, the company's total transaction volume exceeded ¥8.8 billion (US$1.4 billion), with an import value of over US$600 million and an import volume of more than 100,000 tonnes.


Hengxing Group also eventually expanded into the food sector, forming strategic cooperation with some domestic food process companies and catering groups.


Additionally, the group announced that it would invest ¥1 billion (US$157 million) in the food processing sector to maximise the potential of its aquatic industry chain.


- David Lin

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