Feed producer gets US$100m from environment-minded PE firm

By RJ Whitehead

- Last updated on GMT

Feed producer gets US$100m from environment-minded PE firm

Related tags: Seafood, Private equity

KKR has invested US$100m in China’s biggest aquatic feed manufacturer at a time when the consumer freshwater and seafood market is growing faster than other protein segments in the country.

The figure, reported by Bloomberg, equates to a “significant minority stake​” for the global private equity firm in Yuehai Feed Group, which focuses on providing feed and nutrition solutions for shrimp and seawater fish farming. 

The investment will bolster Yuehai’s production and increase its product range to include new feed ranges.

The Guangdong-based producer will in particular target the evolving freshwater fish feed sector as new technology becomes available, Yuehai and KKR said in a joint statement. 

This includes a transition to more advanced floating puffed feed, China’s fastest growing industrial feed category, which is seen as more efficient and environmentally friendly than raw frozen fish and traditional pellet feed. 

China’s new food safety law, introduced this year, has limited the use of raw frozen fish as aquatic feed in a move that is poised to benefit larger, industrialised producers like Yuehai, which have full oversight of the production process. 

This no doubt made the company an attractive prospect for KKR’s investment—its fifth stake in Chinese companies with a focus on improving food safety. Previous investments include China Modern Dairy Holdings, Cofco Meat Investment and Fujian Sunner Development.

Given the strong and rising demand for fishery consumption in China, it is a pivotal time for us to expand and provide healthy aquatic feed to the market​,” said Zheng Shixuan, chairman and chief executive of Yuehai. 

At 35kg per year, China’s average per capita consumption of fish and seafood is relatively low compared to an average of over 50kg consumed by its Japanese and South Korean neighbours.

Yet the segment is outpacing other forms of animal protein in terms of growth as consumers see their incomes grow and become more aware of their health.

We have been impressed by Yuehai’s leading technology, innovative practices and extensive expertise in the feed space​,” said Julian Wolhardt, KKR’s China chief.

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