Thai giant holds off on one pig project, develops another

By Mark Godfrey

- Last updated on GMT

The pig project was of “great importance” for the local government in Danzhou
The pig project was of “great importance” for the local government in Danzhou

Related tags: Pork

Thai agricultural conglomerate Charoen Pokphand (CP) appears to have delayed a project in central China even as it forges ahead with a new deal to breed 300,000 pigs a year in the southerly province of Hainan, in a tie-up with the huge state-owned Hai Ken Group (Hainan State Farm Group).

Locals are scratching their heads in Jia County near Jingdingshan, Henan province over the hold-up to a one million-head pig production project, which CP signed off on in August 2017 with the local government. A ground-breaking ceremony was held in October last year on the site of the project, but currently no works are underway, according to local media. No comment was forthcoming from CP – which operates under the Mandarin name Zheng Da in China.

Under the deal, CP was to breed 600,000 head of pigs itself, with the other 400,000 produced by local villagers. A meat processing plant and feed plant were also incorporated in the project. Intriguingly, the project was also to incorporate a crocodile or alligator (the same character in Mandarin applies to both words) farm for the production of meat and hides.

Of the initial RMB200 million (m) capital put up for the project, CP contributed RMB50m, with a local government-owned investment company adding the rest and taking a 75% stake. The project generated much attention in the populous province of Henan – also home to pork processing giants such as Shuanghui – due to the land and approvals required to be lined up from local government at a time when approvals for pork projects are increasingly difficult to secure from China’s increasingly stringent environmental enforcement agency. 

Despite Chinese pork prices continuing in the doldrums, CP has raced with local conglomerates to build up herd capacity in an effort to grow market share and reduce costs through scale. Earlier this month, representatives from CP and Hai Ken Group met to approve the start to works on a series of piggeries and feed facilities for 300,000 pigs in the Danzhou city region of Hainan, in southern China. Construction was set to start by the end of the year, according to a Hai Ken statement.

The pig project was of “great importance​” for the local government in Danzhou, which wanted to see the project proceed quickly, according to Wang Wen Nan, head of livestock at the Hai Ken Group. CP, meanwhile, was keen to get the project up and running, explained Chen Dan, general manager for China livestock operations at the CP Group. Both were quoted in a Hai Ken statement.

CP’s large feed production capacity in China makes it an attractive partner for local firms seeking to expand in meat production.

A recent meeting of CP and Hai Ken representatives also heard from a representative from Shanghai Ocean University on the feasibility of a shrimp breeding project in the vicinity. It appears CP – which is one of Asia’s leading producer of shrimp – has been exploring multi-species deals with Chinese partners, given the Henan deal also makes reference to the potential for an alligator breeding site.

Local governments around China have been keen to build multi-species projects in what are often titled ‘modern agricultural’ parks. In 2016, CP announced a CNY3.6 billion investment to produce one million pigs per year in six pig breeding bases in Inner Mongolia. CP is also building another facility in Hebei province, which will add 100 million broilers to its poultry production in the country and keep it ahead of local rivals like Guangdong Wens Foodstuff Group Co and the Tongwei Group in the race for customers in a rapidly urbanising Chinese market.

Related topics: Meat

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