BEIJING (Reuters) - Backed by official encouragement, China’s largest pig farming companies and new entrants are racing to build vast hog farms in the north-eastern cornbelt.
Below are an outline of the policies that are driving the shift north and details of companies’ investment plans for the sector:
* August 2017:
New guidelines from the Ministry of Agriculture call for the north-eastern grain basket to be turned into a national meat and dairy production base, part of a broader plan to create stronger demand for the region’s main crops.
The guidelines stipulated that meat output from Heilongjiang, Jilin, Liaoning and Inner Mongolia should account for more than 15 percent of the country’s output and milk output should reach more than 40 percent of national output by 2020. They also urged the integration of large-scale farms with slaughtering and processing industries, and stronger cold chain logistics.
* April 2016:
China’s five-year hog production plan (2016-2020) issued by the Ministry of Agriculture divided the country into four zones, based on the extent to which hog production should be encouraged.
They include the “major” development zone, which includes top hog provinces Henan, Shandong, Sichuan and Hebei, and a zone with “potential” for development, including the north-eastern provinces Jilin, Liaoning, Heilongjiang and Inner Mongolia.
The “restricted” zone encompasses most of the populous south-east and major cities, while the north-west is categorized as a zone suited to “appropriate” development.
Below are examples of companies investing in the pig farming industry in the north:
* Muyuan Foods raised 3.15 billion yuan in May to build five new pig breeding bases in Inner Mongolia, Liaoning, Heilongjiang and Jilin, with total output of 2.1 million pigs a year.
* Chuying said in its interim report in August that it has already recruited more than 40 contract farmers in Taonan city of Jilin, where it aims to produce 4 million pigs a year, and is building a similar integrated production base (breeding to processing) in Inner Mongolia where it plans to produce 3 million head a year.
* Dabeinong plans to produce more than 2 million pigs in the three provinces of north-east China, and eastern part of Inner Mongolia, by 2020, Song Weiping, vice president, told Reuters. That includes 1-1.5 million pigs in Heilongjiang.
* Shenzhen Jinxinnong is building a 1-million head project in Heilongjiang, announced in October 2016.
* Thai conglomerate Charoen Pokphand Foods PCL began stocking a 1 million pig project in Inner Mongolia this month, it said on its website.
* Cofco Meat said in its interim report in September it has built in-house feed mills capable of feeding 1.5 million hogs in Jilin, Inner Mongolia and Hebei.
* Jiangxi Zhengbang said in its first half report in August that it is planning breeding farms in Liaoning, Inner Mongolia and Heilongjiang, with output of more than 1.5 million hogs a year.
* Tech-bank Food is planning to produce 1 million pigs in Heilongjiang province by 2020, it said in December 2016
* Other major companies understood to be expanding in the north-east include the country’s biggest pig farming firm Guangdong Wen’s Foodstuff, top animal feed company New Hope Liuhe, and numerous local producers.
Reporting by Dominique Patton and Beijing Newsroom; Editing by Raju Gopalakrishnan
Our Standards: The Thomson Reuters Trust Principles.