THEY EAT PORK IN CHINA
The growing income level in China means that every Chinese eats four times as much meat as in 1970. More than half is pork, and therefore China is an interesting market for the Danish agribusiness sector.
They eat pork in China. Actually, every Chinese eats more than 30 kg a year on average, and half the world’s pigs live in China. That makes the country the world’s largest market for pork and very interesting to the Danish agribusiness sector.
That goes for DLG, too. In 2014, DLG entered into a partnership with the Chinese manufacturer of animal feed, Puai Feed Group, which is one of the larges animal feed companies in China.
The Chinese company sees DLG as the right partner with important know-how and experience when it comes to quality feed and vitamin and mineral mixes. The strategy is that DLG will help Puai Feed Group deliver high quality products that meet international standards for food safety, which are in high demand in China due to a number of food scandals in recent years. The partnership also provides an opportunity for DLG to enter the Chinese market, which has great potential.
“Our strategic goal is to gain a solid foothold in the Chinese market, and our partnership with Puai Feed Group is a step in that direction”
Kristian Hundebøll, managing director of DLG
Three new factories
Since the partnership was established, the company has invested in new factories in the Hunan and Henan provinces. Furthermore, new products have been launched to improve the production of Chinese farmers and make it more effective. Today, a Chinese sow only has 16 piglets a year, whereas a Danish sow has twice as many.
Feed alone does not make it, and therefore the company includes advice in its product package. It covers e.g. the right combination of feed and advice on how to limit diseases.
IFU contributes with risk capital
IFU has contributed with advice and risk capital in connection with DLG’s acquisition in China. Part of the financing was contributed by IFU Investment Partners (IIP), which was established in collaboration with the pension funds PKA and PBU to provide additional financing for larger IFU projects.
– We are very pleased that IFU participates in our investment in Puai Feed Group. It reduces our financial risks, and we get a respected partner that has worked in China for many years and has great experience in handling joint ventures with Chinese partners, said Kristian Hundebøll.