Da Bei Nong Group breaks ground on feed production site

Da Bei Nong Group recently broke ground on a 240,000-metric-ton feed production site in Loudi, Henan, China, according to a report provided by Smart Agriculture Analytics.
Total investment for the project is around CNY150 million (US$24 million).
Loudi is steadily growing its livestock industry. In 2014, the city was home to 5.62 million pigs and produced 170,000 cows, 80,000 metric tons of aquaculture, and 27,000 tons of eggs. The total value of the city's livestock industry is worth CNY15.1 billion, which is about 60 percent of all agricultural value.
Da Bei Nong Group is a national livestock industry leader that specializes in feed, genetics, pig breeding, and livestock insurance.

AgFeed Industries to pay $18 million to settle fraud charges

AgFeed Industries, a bankrupt Tennessee-based animal feed company, has agreed to pay back $18 million in alleged illicit profits to settle civil accounting fraud charges, according to a Reuters report.
AgFeed was charged by the Securities and Exchange Commission (SEC) in March in connection with charges that it reported fake revenue from its China operations to help increase its stock price.
The SEC said AgFeed’s management in China kepts two sets of books – a real one and one it presented to investors.
According to the report, AgFeed inflated the company’s revenue by $239 million from 2008 through June 2011. The company used fake invoices for feed and hog sales and inflated hog weights in an attempt to sell them for higher prices. It later reported the made-up hogs had died.
In a rare move, the SEC also charged the company’s former U.S.-based independent audit committee chairman, K. Ivan Gothner. It alleges he and former U.S.-based Chief Financial Officer Edward Pazdro learned about the fraud in China after the company merged with the U.S.-based company but failed to conduct any meaningful investigation or properly disclose it. SEC also charged four Chinese company executives with fraud. This case is still ongoing. Attorneys for Gothner and Pazdro have denied the charges.
The settlement is subject to court approval. The company is settling without admitting or denying the charges. The SEC said the $18 million will be distributed to victims of the fraud.

New report on Chinese feed enzyme industry available

A new report, “Research and Forecast of the Chinese Feed Enzyme Industry, 2014-2018,” is available from Research and Markets.
Feed enzymes were introduced to China's feed industry in 1980s. After entering into the 21st Century, as China's fermentation technology of enzymes improved, the production cost has dropped and, as a result, China's enzyme enterprises have developed rapidly and self-dependent brands have been established. Those brands not only take up most share of the domestic market, but are well acknowledged in international market, so the export volume has improved year by year.
The output of China's feed enzymes was 142,000 tons in 2013, up 20.9% over 2012, with total output value reaching CNY2.5 billion (US$4 million). As for the segment market, the output of compound enzyme was 74,900 tons, and that of phytase was 66,900 tons in 2013, up 21.8% and 20.1% over 2012 respectively.
Though the industrial penetration rate is still less than 43%, the future development space is adequate. As the domestic feed sales volume grows and the penetration rate improves, the demand of feed enzyme will surely increase.


Reasons for growth
According to the report, the reasons accounted for the broader development space in China's feed enzyme industry are as follows:


• The stable development of the feed industry has driven the expansion of feed enzyme industry
• Under the background of the constantly improvement of feed industrial scalization, the scientific breeding performed by the large-scale feed enterprises will improve the utilization of feed enzymes
• The improved product utility brought about by continuously innovation and technological improvement of feed enzyme products and the dropping cost of products brought about by the scalization will all promote wider application of feed enzyme
• Under the background of the constantly emphasis on food safety and advocacy of environmental protection, feed enzyme industry will continuously acquire national policy support and promote feed industry to advance forward
The total output of China's feed enzyme industry is estimated to reach 167,200 tons with output value of CNY2.9 billion in the end of 2014. By 2018, the total output will reach 272,000 tons with output value of CNY4.7 billion, and the annual growth rate will be 12.9% and 134% respectively.

ADM building new feed-premix plant in eastern China

Archer Daniels Midland Company (ADM) is building a new feed-premix plant in Nanjing, in eastern China, bringing to three the total number of facilities in the company's Chinese premix network.
The Nanjing plant, which is expected to be complete in the first half of 2015 and employ 150 people, will manufacture nutritional feed premixes that can be added to animal feed to promote good health and optimal growth. Such premix formulas typically contain various vitamins and minerals, amino acids such as lysine and threonine, and other ingredients.
ADM estimates it will manufacture 30,000 metric tons of premix products per year at the Nanjing facility, which will also provide 80,000 metric tons of additional capacity for the production of complete feeds and concentrates.
"ADM is committed to helping China meet its goals for food security and safety, and our plant in Nanjing is part of this commitment," said Brent Fenton, president, ADM Animal Nutrition. "As the country's population continues growing and personal incomes rise further, the nation's demand for meat is expected to increase. In this environment, our decades of experience producing animal feeds and feed ingredients-coupled with our insistence on consistent, high-quality products-will serve China's livestock producers well."
The Nanjing facility complements ADM's existing premix plants in Tianjin and Dalian in northern China. Additionally, as part of a broader effort to help China further its food-security goals, the company is collaborating with China Agricultural University on a research program to develop efficient and lower-cost feed programs for dairy cattle using corn processing co-products, such as distillers grains and locally grown corn stover-the stalks, cobs and leaves left on farmers' fields after the harvest.  Feeding cattle a mix of processed crop residues and co-products can free up grain for other uses and reduce the use of imported hay and other forages, ADM says.

China feed producer Yongye International to be taken private

Chinese plant and animal feed maker Yongye International Inc. is being taken private by a group that includes its CEO in a deal worth approximately US$339.2 million, according to reports.
In October 2012 the company announced an offer by a group including Chairman and CEO Zishen Wu, Full Alliance International Ltd., MSPEA Agriculture Holding Ltd. and Abax Global Capital Ltd. The group initially offered $6.60 per share for the shares they don't already own, but Yongye said that it accepted a higher bid of $6.69 per share - a 12 percent premium to the company's September 20 closing price of $5.98.
Yongye currently has approximately 50.7 million outstanding shares, according to FactSet.
The company's board approved the transaction, which is targeted to close before the end of fiscal 2014's first quarter. It still needs approval from at least a majority of those holding its outstanding shares.

Chia Tai Group opens China feed mill

Chia Tai Group has opened its new, US$25 million feed mill in Jingchuan, China. The facility has an operating capacity of 300,000 metric tons and features a large production workshop, according to the company.
The feed mill will also implement Chia Tai's scientific nutritional formula, computer-controlled production process and quality control methods for the processing and production of aquatic animal feed. The mill will employ 200 people.

China grain needs to grow through 2014

China's grain requirement for feeding to farm livestock and aquaculture between October 2013 and September 2014 is set to grow by another 1.6 percent after an increase of nearly 2 percent in the current crop marketing year, according to information presented to the latest annual conference of the International Grains Council.
Xiaohui Wang, chief of market monitoring for the National Grain and Oilseeds Information Center (CNGOIC) in Beijing, told the meeting that 159.26 metric tons of feed grains have been used in China in 2012-2013 and usage in 2013-2014 is likely to rise to 161.75 million metric tons.
The 124 million metric tons of maize used in Chinese feeds in 2012-2013 compared with just 83 million metric tons in marketing year 2003-2004, said Wang. Over those 10 years, while corn use grew at a rate of 4.6 percent per year, expansion in China's livestock and poultry sector prompted national feed production and consumption to grow by 9 percent annually.
The progression for feed in 2013 was slowed during the early months of the year by an outbreak of H7N9 avian influenza that caused illness and deaths among people who had contact with live poultry. Although sales of chickens and eggs fell in certain parts of the country and this affected the demand for poultry feeds, Wang told the meeting that the situation was recovering and would be unlikely to impact strongly on annual feed figures
The conference also heard a forecast from International Grains Council analysts that China may need to import as much as 7 million metric tons of maize in the 12 months to June 2014, compared with 4 million metric tons in 2012-2013. Wang's presentation included a CNGOIC view that China's annual corn imports between October 2012 and September 2013 will have amounted to 2.7 million metric tons, but the amount could almost double to 5 million metric tons in the next marketing year as the demand for use in feed and food rises faster than domestic production.

Yeast company receives safety certification

Angel Yeast Co. Ltd., the Chinese-based yeast producer, received the Good Manufacturing Practices and Hazards Analysis and Critical Control Points certificate. The certificate is awarded to companies that guarantee reliability, quality, sustainability and safety. Thirty-four Chinese-based companies have implemented the GMP+.
"Involving GMP+ can not only increase the recognition of product quality of a company and in turn give a competitive advantage, but also increase the management level of a company for higher quality products," said M. Yu Xuefeng, director of the Chinese Association of Feed Industry. 

Chinese feed manufacturer’s first pig feed plant is operational

China’s quest to become self-sufficient in pork production is on track as a new pig feed plant from Gaoming Tongwei Feed Co. in Foshan City is now operational. 
As one of China's leading aquatic feed manufacturer, Tongwei Stock has been involved in the sale of pig feed, but Gaoming Tongwei is its first division that specializes in pig feed production. 
With a total investment of RMB 50 million on 3.335 hectares of land, Gaoming Tongwei will be able to supply animal feed to major livestock farming areas in Guangdong province as Foshan, Jiangmen, Yunfu and Zhaoqing. 
In the future, Tongwei may build another pig feed plant at Qingyuan. Guangdong Province is a thriving livestock region with a competitive feed market. Tongwei’s foray into this area will further intensify the fight for animal feed market share.

China feed output up 4 percent in 2011–2012

The total feed output in China rose 4 percent year over year to 169 million tons, accounting for around 20 percent of the global total and ranking number one in the world, according to the latest report from Research and Markets.
The output of pig feed topped the list at 62.1 million tons, up 4 percent year over year. The poultry feed output enjoyed the fastest growth, with output increasing 5 percent year over year to 49.8 million tons in 2011. The aquatic feed and ruminant feed saw low output, but aquatic feed witnessed larger growth space, said the report.
Currently, China has around 13,000 feed companies, most small, and over 20 percent of medium-sized feed companies have been acquired by large players. The top 10 feed manufacturers such as CP Group, New Hope Group, Wens, Zhenghong and TRS Group together occupy more than 30 percent market share by sales. In recent years, given that the large companies continually increase their production capacity to expand the market, the concentration degree of the feed industry in China will be enhanced, as well, according to Research and Markets. For instance, New Hope Group brought Liuhe into the listed company through asset integration in November 2011. After the reorganization, Liuhe contributes feed capacity of 9.45 million tons to the Group.
Additionally, Chinese enterprises are carrying out expansion in the overseas market. The third feed mill invested by Tongwei Co. Ltd. in Vietnam went into operation in June 2012. Haid Group, engaging in the production and sales of aquatic feed and aquaculture preparations, subscribed equities in Vietnam-based Panasia in December 2011, with shareholding ratio reaching 80 percent after the capital increase. New Hope Group plans to set up eight feed plants overseas annually after 2011, which will boast a capacity of 100,000–200,000 tons, and to double its overseas investment each year. Currently, 20 enterprises like New Hope, Tongwei Co. Ltd., Haid Group and Ningbo Tech-bank which have established plants in Vietnam make up 10 percent to 15 percent of the market share in the Vietnamese feed industry.

China feed production hits 80.5 million tons first half 2012

In the first half of 2012, China’s mixed and compound feed output reached 80.5575 million tons, according to data from a report, "Chinese Feed Industry Analysis and Investment Strategy Report 2013-2017."
Of that, 66 percent (53.1697 million tons) was made up of compound feed and the other 34 percent (27.3878 million) was made up of mixed feed. The report indicated that China’s production of compound feed in June was 11.77 percent (10.597 million tons) higher than in 2011. Analyzing province by province, Shandong province’s mixed feed output reached 7.606 million tons, increasing 18.40 percent over 2011's number and making up 14.31 percent of China’s total output. Following closely behind are Guangdong province, Liaoning province and Guangxi province, making up 9.27 percent, 8.34 percent and 7.52 percent of the total, respectively.

During China's 12th Five-year Plan Period, China is expected to see a steady growth of feed output, and by the end of that period, the total feed output is estimated to reach 200 million tons. Among all the output, compound feed will hit 168 million tons, concentrated feed will be at 26 million tons and pre-mix feed will reach 6 million tons, according to the report. There will be over 50 feed companies with an annual production capability of 500,000 tons, taking up 50 percent of the country’s total feed output.

China Food Company sells animal feed business

China Food Company, a Chinese manufacturer of cooking dipping sauces, has sold its animal feed business to Korean-owned Wisehand Planning for US$16 million, according to reports.
In the breakdown of the sale, the business will be sold for $8.75 million, a new feed factory will be sold for $5.5 million and the land on which the factor is being built will be sold for $1.75 million. "The board is pleased with the progress of the disposal of the feed business at a reasonable price despite the depressed stock markets," said John Mclean, chairman of China Food. "As a result of the disposal, the company will be able to focus on its core condiments business and the proceeds of the disposal will be used for working capital and restructuring the group's lending facilities." The transaction is expected to be completed by July 30.

China forecasts increased feed output in 2012

China’s expanding feed production continues to take more grain supplies, according to Bingzhou Cheng, director general at state-owned grain reserves corporation Sinograin. On the basis of grain use forecasts, China expects at least another 3.75 percent increase in the volume of feed produced in 2012.
In remarks to a global conference organized by the International Grains Council, Cheng presented figures indicating that feed manufacturing in China utilized 200 million metric tons of grains in 2011, compared with 270 million tons for food. The forecast usage for feeds in 2012 is expected to rise to 207.5 million tons. More of the corn needed will be produced domestically in 2012, said Cheng. The escalation in corn prices on China’s internal market to their highest level in history has persuaded growers to plant an additional 2 percent of land for the crop in 2012, taking the total area to 33.75 million hectares.

China feed market to grow as livestock demand increases

As livestock production in China increases, import/export group and food manufacturer Cofco predicts the country may double its industrial animal feed level by 2020, according to a Bloomberg report.
In 2009, animal feed output -- mostly from corn, soybeans and other oilseeds -- was at 148 million tons, according to Liu Xiaoyu, general manager of Cofco’s feed division. In just 10 years, that figure could increase to more than 250 million metric tons.
This growth has been spurred, in part, by livestock reform in the country, leading to more large-scale operations, and government assistance.
Liu said from 1980 to 2009, China's feed production grew at about 16% per year, with annual growth closer to 8% per year from 2000 to 2009.
Cofco is state owned and is China’s largest grain trader.