Pig feed in China
The growing income levels in China have led to a growing demand for meat. Since 1970, per capita meat consumption has quadrupled to an average of about 60 kg of meat annually, more than half being pork. This makes China the world’s largest market for pigs and as such an attractive market for the Danish agro business.
Three years ago, IFU invested in a large scale pig farm in China in association with Scandinavian Farms, and in 2014, IFU assisted DLG in entering into a joint venture with the Chinese animal feed producer PUAI Feed Group.
DLG is to contribute know-how and experience in the production of quality feed as well as vitamin and mineral mixtures. Production and sales are handled by the Chinese partner.
- One of our strategic goals is to gain a solid foothold in the Chinese market, and our partnership with PUAI Feed Group is a step in the right direction, said Kristian Hundebøll, CEO in DLG.
The right partner
PUAI Feed Group is one of the larger animal feed production companies in China with eight production plants and a total production of 320,000 tons of animal feed annually. The Chinese company sees DLG as the right partner with the know-how and technology to assist PUAI in supplying high quality products that adhere to international food safety standards, which are highly demanded in China due to a number of food quality scandals in recent years.
The aim is to grow PUAI Feed Group’s market share in China by producing high quality products and building a number of new production plants.
Contributing risk capital
IFU has contributed risk capital and advisory services. And IIP (IFU Investment Partners) has made a co-investment in the Chinese joint venture.- We are very pleased to have IFU participating in our investment in PUAI Feed Group. That will help reduce our financial risk, and at the same time we get a very reputable partner on board, who has dealt with China for many years and has profound experience from handling joint ventures with Chinese partners, said Kristian Hundebøll.