March 29, 2012

China's grain trading giant, Cofco Group, has increased investment in pig breeding, after Wuhan Iron & Steel (Wisco) intends to do the same.

Cofco said it plans to spend RMB3.5 billion (US$555.3 million) in a pig-breeding base in Sichuan's Guangyuan, which could hold more than two million pigs. Cofco has already set up four major livestock and poultry breeding bases in Shandong, Tianjin, Jiangsu and Hubei.

In 2011, the group had more than 1.2 million pigs slaughtered across its bases. The grain trader has also joined hands with Japanese food producers including Mitsubishi and Itoham Foods to set up a joint venture. The JV is looking for opportunities to acquire domestic companies in the industry.

International investment banking giant, Goldman Sachs has also invested in a number of pig breeding farms in Anhui's Huangshan and has won support from the local government.

One of the reasons for pig-breeding to become popular around the country is fiscal subsidies provided by the government. Currently, the Chinese government offers RMB800,000 (US$126,810) in subsidy for large-scale pig farms that hold 3,000 to 10,000 pigs.