October 3, 2013
China - Update on recent industry developments (week ended October 3, 2013)
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COFCO set to start piglet production at Jilin hog farming base
China National Cereals, Oils and Foodstuffs Corporation (COFCO) has invested RMB3.6 billion (US$588.18 million) in a hog project in Songyuan City of Jilin, which is touted as the largest hog farming base in the northeast of China. The project started in April this year, and the piglet production is ready to commence in October.
The project includes the construction of a 2-million-head hog farm, a feed mill, a slaughtering and processing plant, as well as other facilities that form a complete hog production chain.
When fully operational, the base is expected to generate sales revenue of RMB5 billion (US$816.87 million) and rake in a profit of RMB800 million (US$130.69 million) a year. It will also turn in RMB35 million (US$5.72 million) of taxes annually and provide 2,000 jobs.
COFCO's director Yu Xubo commented, "Two million head is the initial capacity, and we are planning to increase that capacity to five million."
"Jilin Province is the best ecological region in the country. It does not only provide plenty of feed supplies, but also ample land resources," he added.
Yu believes now is the right time for the development of ecological agriculture, and says that COFCO will build an environmentally-friendly industrial chain at the hog farming base. Based on that model, the company will recycle the animal waste from the hog production to produce biogas and fertiliser, which will then be used to generate power and crop planting at the base.
DaChan Food to set up broiler operation in Guzhen County
DaChan Food (Asia) Limited (DaChan Food) has signed an agreement with Guzhen County to develop a broiler production project.
DaChan Food plans to invest RMB1.29 billion (US$210.60 million) in the project, with a goal to build a 60-million-bird slaughtering plant, a 300,000-tonne feed mill, a 60-million-bird hatchery, a 50,000-tonne cooked-food processing plant, together with three parent-stock breeding farm and 60 broiler farms.
DaChan Food is engaged in the manufacturing of feed, poultry and chilled meat and processed food. The company is based in Taiwan and has established operations in China, Vietnam and Malaysia.
Twins Group to open new feed plant in Ganzhou City
Jiangxi Twins Group Co., Ltd. (Twins Group) has signed an agreement with Ganzhou municipal government to open a feed plant in the city.
Twins Group plans to invest RMB500 million (US$81.68 million) to build a feed plant in the Ganzhou Economic Development Zone. When fully operational, the plant is expected to generate sales revenue of RMB1.2 billion (US$196.00 million) and turn in taxes of RMB30 million (US$4.90 million) a year.
Ganzhou Economic Development Zone currently hosts more than 30 food processing enterprises. From January to August 2013, the collective industrial output at the zone reached RMB4.82 billion (US$787.36 million), a 15% rise on-year.
Hunan Xiangjia to build large-scale poultry slaughtering plant in Shimen County
Hunan Xiangjia Animal Husbandry Co., Ltd. (Xiangjia) plans to invest in a 60,000-tonne poultry slaughtering and cold chain logistics project in Shimen County.
According to the plan, the company will invest RMB204 million (US$33.35 million) in the project, with an aim to build a 200-Mu (13.33-hectare) poultry slaughtering plant, together with cold chain logistics by September 2015.
The construction of the plant will be divided into two phases. In phase one, a 40-million-bird slaughtering and processing line will be built at a cost of RMB104 million (US$17.00 million). When operational, the production line is expected to produce 60,000 tonnes of poultry meat and products, which will generate sales revenue of RMB900 million (US$147.10 million) and turn in taxes of RMB90 million (US$14.71 million) a year.
In phase two, a food processing plant will be built at a cost of RMB100 million (US$16.34 million). When operational, the plant will produce 10,000 tonnes of cooked food, generate sales revenue of RMB500 million (US$81.71 million) and turn in taxes of RMB50 million (US$8.17 million) a year.
Zhengbang partner private investor to set up subsidiary in Guangdong
Zhengbang Group Co., Ltd. has reached an agreement with a private investor Deng Yongbin to jointly invest RMB15 million (US$2.45 million) in a feed company in Guangdong.
The two parties will set up Guangdong Junyou Feed Co., Ltd., with Zhengbang Group holding a 55% stake and Deng owning the remaining 45%.
Guangdong Junyou Feed Co., Ltd. will be mainly engaged in the manufacturing and sale of poultry and hog feed, with aqua feed as a supplement to its core business.
Zhengbang Group says the establishment of the Guangdong subsidiary will extend the group's feed business, and expand its market share in Guangdong province.
Chongqing Grain Group builds soybean oil plant in Zhong County
Chongqing Grain Group Co., Ltd. plans to invest RMB1.6 billion (US$261.33 million) in an oil crushing facility in Zhong County.
The facility, which spans 366 Mu (24.40 hectares), will be capable of producing 100,000 tonnes of refined soybean oil and 400,000 tonnes of concentrate and premix feed. When fully operational, it is expected to generate sales revenue of RMB8.2 billion (US$1.34 billion), turn in taxes of RMB50 million (US$8.17 million) a year, and provide 500 jobs.
Chongqing Grain Group's chairman Hu Junlie says that the group has chosen Zhong County for two reasons. One is because the county has 160,000 Mu (10,666.67 hectares) of planting acreage for soy, and produces over 27,000 tonnes of soy every year. The other reason is that the county is a logistical hub, which has an advantage in connecting land and water transportations.
Chongqing Grain Group is also mulling the plan to invest another RMB700 million (US$114.37 million) in Zhong County to build a grain trading hub, which will combine facilities and services for grain storage, logistics, processing and agricultural commodity trading.
Chongqing Grain Group mainly engages in the manufacturing of bio-diesel fuel and soy lecithin products.
* 1 hectare (10,000 sq. meters) =15 Mu
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