November 7, 2013
China - Update on recent industry developments (week ended November 7, 2013)
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Zhengbang and XPCC set up joint venture for hog production in Xinjiang
Jiangxi Zhengbang Breeding Co., Ltd. (Zhengbang Breeding), a subsidiary of Zhengbang Group, has signed an agreement with the 22nd regiment of Xinjiang Production and Construction Corps (XPCC) to set up a joint venture in Xinjiang - Xingfu Jiamei Breeding Co., Ltd..
According to the agreement, Zhengbang Breeding will invest RMB16 million (US$2.62 million) and hold a 80% stake in the new company; while the 22nd regiment of Xinjiang Production and Construction Corps will invest RMB4 million (US$655,042.84) and owns a 20% stake.
Zhengbang Group says the new company will engage in the breeding and commercial farming of hogs. It adds that the establishment of the joint venture will help promote the brand awareness of the group in Xinjiang.
XPCC cooperates with Qinnong and Golden Dragon on hog project
Xinjiang Production and Construction Corps (XPCC) has signed an agreement with Shanghai Qinnong Animal Husbandry Technology Co., Ltd. (Qinnong) and Wuhan Golden Dragon Husbandry Co., Ltd. (Golden Dragon) on a 2-million-head hog project.
According to the agreement, the two livestock companies will invest a total of RMB200 million (US$32.81 million) in the project, with the first batch of investment totalling RMB80 million (US$13.12 million). In cooperation with XPCC's 90th regiment, the three parties will build a 2-million-head hog farming base in Xinjiang.
Construction of the base is divided into three phases, with phase one expected to start in March 2014. Upon completion of phase one, the base will have an initial inventory of 50,000 hogs.
Huadu partners Yum! Brands to build largest meat processing plant in Asia
Beijing Huadu Broiler Co., Ltd., a subsidiary of Beijing Capital Agribusiness Group Co., Ltd., has signed a strategic framework agreement with Yum! Brands Inc., China Division on a meat processing plant project.
According to the agreement, the two companies will invest a total of RMB1 billion (US$164.10 million) to build a meat product processing plant in Hengshui City of Hebei province, slated to become the largest in Asia.
When fully operational, the plant is expected to reach a slaughtering capacity of 60 million broilers per year.
Huadu also says that the chicken products that it supplies to Yum! Brands are expected to total 11,500 tonnes by the end of 2013, a 30% jump from 2012.
East Lake Hi-Tech to become major shareholder in Tianli Agritech
Tianli Agritech, Inc., a leading producer of breeder hogs and black hogs, has agreed to sell 2.76 million shares of its common stock to the director of Wuhan East Lake Hi-Tech Innovation Center (East Lake Hi-Tech), Gong Wei.
The transaction totals US$3.20 million, after which Eastlake Hi-Tech will become a major stakeholder of Tianli Agritech.
Li Hanying, chairwoman and CEO of Tianli Agritech, says, "We are very pleased to welcome Mr Gong Wei to be a substantial shareholder of Tianli Agritech, and appreciate the support of our new and existing investors. As a prominent investor, a prolific author, and one of the pioneers of incubation centers in China, Mr Gong currently serves as the director of Wuhan East Lake Hi-tech Innovation Center, a position he has been holding since 1987. We believe the value of having Mr Gong as our substantial shareholder is both financial and strategic and expect to benefit tremendously from Mr Gong's involvement in our business."
Gong comments, "We believe China's continuing transition from export and investment-driven growth to domestic consumption-driven growth bodes well for the hog industry. With its well established market position, steadily growing Black Hog Programme, and quickly expanding retail presence, in our view Tianli Agritech is well positioned to further strengthen its leading market position in the Wuhan market and take full advantage of the growing trend in pork consumption in China."
Tianli Agritech, which is valued at about RMB300 million (US$49.27 million), currently produces 170,000 hogs a year, and expects to produce 10,000 black hogs in 2014.
DBN builds Marine Life Science and Technology Centre at Zhaoan County
At Zhaoan Jindu Marine Life Industrial Park, Da Bei Nong Gourp (DBN) is building a Marine Life Science and Technology Centre. To date, DBN has invested RMB163 million (US$26.74 million) in the project, and construction is well on track.
With the total investment expected to reach RMB510 million (US$83.66 million), the DBN Marine Life Science and Technology Centre, which spans 210 Mu (14 hectares), will include research and development facilities for aquatic products, aqua feed and biological reagent products.
When fully operational, the centre is expected to generate an annual output of RMB2 billion (US$328.22 million).
Wens Group's Pingchang subsidiary launches 300,000-tonne feed plant
Pingchang Wens Animal Husbandry Co., Ltd, a subsidiary of Wens Group, has officially started operation of its 300,000-tonne feed processing plant.
The feed plant, which was initiated in September 2012, has laid the foundation for the group's 5-million-head integrated hog operation.
Wens Group mainly engages in poultry, swine, and cattle farming, and supplies meat products throughout China.
* 1 hectare (10,000 sq. meters) =15 Mu
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