Northern China to see significant investment in poultry sector

By Mark Godfrey

- Last updated on GMT

The project is entering full production this month
The project is entering full production this month

Related tags Livestock China Poultry

Six of China’s biggest poultry players have combined forces to open a huge RMB6 billion chicken breeding and processing project in northern China.

The 530,000sq m project, which is entering full production this month, is projecting RMB740m-worth of livestock output and RMB918m in products each year according to a spokesman for one of the firms, Shandong Yisheng Livestock & Poultry Breeding Co.

It is co-investing in the project with Beidahuang Baoquanling Agriculture & Animal Husbandry Development Co, Shandong Minhe Animal Husbandry Co and Qingdao Kangdi Industry Co, as well as Beidahuang Meat Industry Corp and Zhong Chu Qin Corp.

Based in Hegang city near the Russian border, the facility – which will be operated by state-run Beidahuang Baoquanling – will breed white-feather chickens. Yisheng director Chi Handong described the facility as a "new step forward"​ for chicken breeding in China, in a statement to media.

The project will also produce 700,000 tons (t) of feed per year, with access to production for the investing companies according to a statement from Yisheng, which has been focused on breeding progenitor chickens, parent chickens as well as breeding chickens for processors.

Also among the attendees at the opening in Hegang were executives from pork-focused Henan Shuanghui Investment & Development Co, as well as Shanghai Liuhe Qinqiang Food Co, a poultry processor. Neither firm has declared an investment in the project but both are customers of Beidahuang’s feed operations.

The Hegang opening follows a 2013 deal which saw Beidahuang Baoquanling join Shandong Minhe and Qingdao Kangdi as well as Beidahuang Meat Industry Corp in a RMB5bn project set to produce 1.20 million birds and 36,000t of meat as well as 700,000t of feed, per year.

As the world’s second-biggest poultry producer in volume terms, China has been hit by avian influenza in 2013, but also in 1996 which led to a drop in prices and earnings for the sector. But there has been a steady increase in recent years in poultry production and consumption, with government subsidies encouraging consolidation and the emergence of ‘dragon head’ or regional large-scale firms which integrate breeding, feed and processing operations.

In the wake of bird flu outbreaks, China has been guiding the industry away from wet markets to refrigerated sales. Integrated operations seek to combat the rise in feed prices, which has eclipsed growth in poultry meat and chicken prices due to China’s tightening supplies of grain and increased dependency on imports.

China’s largest agricultural conglomerate, Beidahuang, is headquartered in Harbin city, but has large farmland interests nationally and internationally. As well as producing 6.3 million head of poultry the firm runs 148 grain processing centres, making it well placed as a large-scale feed producer. Beidahuang has also been active overseas, farming land for grain and soybean production.

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