China animal feed sector profit up, operating revenue down

With the weak performance of livestock farming, significant decline of the number of hogs and decreasing demand for animal feed, the operating revenues of China’s animal feed sector in the first three quarters of 2015 totaled to US$19.39 billion, down three percent year on year. Meanwhile, the gross profit margin of the same period was 11 percent, up 1.64 percent year on year, reported Feedtrade.com. It was the decreasing costs of the feed ingredients, especially prices of the corn and soymeal that accounted for the increase of the gross profit margin.
According to the data collected by China Feed Industry Association, which had tracked the business of 180 Chinese feed companies, the pig feed production of these companies in the first nine months of 2015 fell 16 percent year on year; the production of aquatic feed decreased by 14.4 percent. As for the poultry feed, the output of the feed for layers declined 4.4 percent compared with that of last year, while the yield of the feed for broilers increased 13.7 percent year on year.
In the fourth quarter of the year, with the upturn of the hog prices, the year-on-year decline of the sales volume of the pig feed began to narrow; sales changes of the aquatic feed are not obvious with the arrival of the off-season. The feed sales for broilers are likely to grow from 2014 and the sales for layer feed might stay flat with last year. According to Feedtrade.com, the sales volume of feed in 2015 as a whole is expected to see another downturn since 2013.
The Deputy Secretary General of China Feed Industry Association Sha Yusheng said on November 23 that the number of feed production companies is fewer than 9,000, compared with 7,000 in 2014. Of the 10 leading feed companies including Tongwei Co. Ltd., Haid and Zhengbang Group, only four of them reported year-on-year revenue growth.

China allocates US$203 million for animal agriculture

A sum of nearly US$203 million has been allocated by the Central Budget to support China’s animal husbandry industry in 2015, an increase of US$29.63 million compared to 2014, reported the Department of Agriculture of Ministry of Finance of People’s Republic of China.
The effort aims to increase animal products production in China, and guarantee that there are sufficient supplies of meat products in large city and medium-sized cities.
Of the total funds, US$171.47 million is to be used to support the standardized farming of livestock and poultry, with an emphasis on the standardization of moderate-scale pig, layer, broiler and beef cattle farms. Also, the money is used to improve the infrastructure, such as housing of animals, farming equipment and facilities, environmental control, and disinfection. Another US$31.52 million is used to facilitate the standardization of the fishery industry.
Ten provinces such as Hebei and Jilin are chosen to pilot financial programs for rural areas by making full use of Central Financial Assistance Grants by means of credit guarantee and subsidies, and maximizing the benefit of financial capital.

NAMI signs cooperative agreement with CSIQ

The North American Meat Institute and The China Society of Inspection and Quarantine (CSIQ) has signed an agreement to cooperate on key food safety programs and to enhance the technical information exchange between the groups.

Under the agreement, CSIQ and the Institute will strengthen technology exchanges and cooperation in inspection and quarantine, collaborate on inspection and quarantine verification and food safety cooperation and communication at the local and national level. The two organizations also will share information concerning regulatory and scientific developments that can impact their members and disseminate the information, as appropriate. Both organizations will convene periodically to explore additional mechanisms that would mutually benefit each organization’s members.

CSIQ is approved by the State Council of the People's Republic of China, registered by the Ministry of Civil Affairs and supported by General Administration of Quality Supervision, Inspection and Quarantine of the People's Republic of China (AQSIQ). CSIQ is a national, non-profit, voluntary organization that aims to promote academic communication and technical cooperation, advocates national high-tech inspection development and seeks to enhance the performance and level of inspection.

“This newly formed partnership is consistent with the Institute’s long-standing philosophy that food safety should be a non-competitive issue,” said Institute Chairman Dave McDonald, president of OSI Industries. “We both know there is a time to compete against one another – that makes both of us better and stronger. But there is also a time when cooperation should trump competition, and that is when it comes to food safety.”

“Our nations individually have some of the best minds in science and technology and food technology in particular,” McDonald said. “Separately, we are leaders, but working together, we can become exceptional leaders. In fact, we can help create a new global path.”

The Institute’s Senior Vice President of International Trade William Westman will serve as the liaison to the newly formed partnership. The Institute is also a founding member of the U.S.-China Agriculture and Food Partnership.

Report: China animal feed output down 1.7 percent

ASKCI has released the performance ranking report of the top listed animal feed companies in China for the first half of 2015 by total revenues.
The demand of the feed market was influenced by the falling profits of the animal husbandry industry in the first half of the year. According to the data from the 180 key companies tracked, the total output of animal feed in China in the first half of 2015 was 87.3 million metric tons, decreasing 1.7 percent year on year. Among the total production, the output of pig feed was 36 million metric tons, decreasing 7.1 percent year on year. Layer feed output was 13.5 million metric tons, down 0.7 percent year on year, and broiler feed output was 23 million metric tons, down 1.05 percent year on year.
The increased profits came from the decreasing costs of feed ingredients. The average purchase price of corn was CNY2,400 (US$376.88) per ton and the purchase price of soybean meal was CNY2,600 (US$408.29) per ton, hitting the lowest level of the past five years. With many alternative products replacing corn in the feed industry, the costs of feed ingredients declined dramatically, enabling Chinese feed companies to profit.
According to the report, New Hope Group and Haid Group had the highest revenue among Chinese feed manufacturers in the first half of 2015.

New Hope Group

New Hope Group is China's largest feed manufacturer and one of China's largest agri-husbandry enterprises. New Hope Group has built feed mills and poultry plants in several Southeast Asian countries. In 2014, the company had 200 feed mills and produced 18.7 million metric tons of feed.

Haid Group

Haid Group focuses on research and development, production and sale of a variety of feed products. Aqua brands include Hinter, Haid, Hailong, Dachuan, Haibei, Fengguang, and Rongchuan. In 2014, Haid produced 5.52 million metric tons of feed.

China Animal Husbandry Industry's revenues up 32 percent

China Animal Husbandry Industry Co. Ltd. released its semi-yearly report on August 28. During the reporting period, the company gained revenues totaling CNY2.09billion (US$327.9 million) up 32.12 percent year on year; the net profit of the shareholders was CNY145 million (US$22.75 million), down 4.82 percent from the same period compared with last year, according to STCN.
According to the report, in the first half of 2015, the outbreaks of animal diseases have been relatively stable while the animal husbandry industry has been at a cyclical low and has resulted in the decrease of the livestock on hand. These factors account for the change of revenues and profits of the company.
China Animal Husbandry Industry is also under the influence of new management policies on animal vaccines and veterinary drugs by the government as well as more rivals coming to the domestic market with similar products.
Founded on December 25, 1998, China Animal Husbandry Industry Co. Ltd. is the largest animal  health product manufacturer, one of the key manufacturers of feed additives and one important member company of China National Agricultural Development Group Co. Ltd. (CNADC) — the only central agricultural enterprise directly supervised by State-Owned Assets Supervision and Administration Commission of the State Council (SASAC).

China’s Zhengbang expanding pig and feed production

Zhengbang Group, a leader in agricultural industrialization and agroprocessing in China, has announced that it will raise CNY1.139 billion (US$190 million) to expand its pig and feed production. Of the money the company raises, CNY732 million will be invested towards live pig operations, CNY64.5927 million will be devoted to new feed production sites, and CNY340 million will be used to repay loans from various banks.
The project includes three pig breeding centers in Fuyu that will house 9,600 pigs, a 10,000-head piggery in Haifeng, and a 4,800-head piggery in Ji'an. Collectively, this project is expected to produce a total of 404,000 commercial pigs and 96,000 piglets annually to contribute CNY664 million in revenue and CNY79 million in net profits, according to a report provided by Smart Agriculture Analytics.
The new feed mill will have CNY64.5927 million in funding and is planned to produce about 600,000 tons of mixed feed, 120,000 tons of aquaculture feed and 300,000 tons of pig feed annually to earn CNY1.53 billion in revenue and CNY11.166 million in net profits.
Zhengbang hopes the expansion will lower its debt-asset ratio and increase financial stability.
Records show that the company's main shareholders did not participate in the recent purchasing plans.

Chinese livestock companies hurt financially in 2014

China's livestock companies – particularly the ones that are operating in the pig industry -- had a rough financial year in 2014, according to annual reporting numbers released in April. Of China's 13 livestock companies that are traded in the A shares market, two of them experienced net losses for the year. Of the remaining 11 companies, none earned more than CNY100 million (US$72.9 million) in net profits, stated a report provided by Smart Agriculture Analytics.
Together, these 13 Chinese livestock companies earned a total of about CNY220 million (US$247) in profit in 2014 – an amount that is less than what most leading companies would earn in a month.
The swine industry had an especially difficult time during the first half of 2014, both live hog and pork prices dropped to their lowest levels since 2006. With the prices as they were, some companies reportedly lost up to CNY300 (US$337) per head. Pig and pork prices did recover slightly during the period from July to September, but once October arrived, the market again plummeted.
While the Chinese pig industry has seen some positive signals of an economic recovery so far in 2015, the livestock companies remain cautious about their financial situations.

China Food Company’s sale of animal feed business ‘on track’

China Food Company Plc, a leading Chinese manufacturer of cooking and dipping sauces, has provided an update on the sale of its animal feed business.
The board has appointed PwC Beijing to manage the sale. Following the initial teaser documents that were distributed, the group has announced that a detailed information memorandum and financial projections have been sent to those parties who have already expressed interest.
PwC Beijing is in contact with potential investors both in China and internationally, and the board said it is pleased to be entering into the next phase of the process.
Operationally, the feed business continues to show growth in sales and is making a positive contribution to the group. Overall, the sale process is on track with the timing that has been outlined previously, with the sale expecting to conclude by summer 2014.

China opens first veterinary association

China’s first national veterinary association was recently established in Beijing to improve the domestic veterinary system and enhance international cooperation, announced China’s Agriculture Ministry (MOA).
This non-government, nonprofit organization will contribute to animal disease control, animal welfare improvement, industry standard normalization, local veterinarian training and further involvement in global veterinary affairs, Vice Minister of MOA, Gao Hongbin, said in its inaugural meeting.
Jia Youling and Zhang Zhongqiu were named president and secretary general of the association.