May 24, 2005


China's New Hope Group acquires Liuhe Feed


On May 18, China's First Financial Daily reported that New Hope Group had acquired Liuhe Feed Stock Co. Ltd, also known as Liuhe. Comprising two independent corporations, both the brand names of Liuhe as well as that of New Hope will be retained. New Hope's managing director, Liu Yonghao, now takes on the same title at Liuhe.

In a comment to the First Financial Daily, Liu revealed that the merger took place within six months from initial planning. "New Hope now holds half the shares in the new company, with the previous Liuhe shareholders and the present management jointly owning the other half," said Liu.

The privately owned Liuhe grew over a period of 13 years to emerge a major feed producer in China. In FY2004, feed sales at Liuhe reached 2.4 million tonnes or a revenue of RMB7.5 billion, according to former managing director, Wang Bingliang.

Currently, there are more than 50 feed millers in Shandong province with projected total output expecting to reach 3 million tonnes of feed each, and achieve RMB10 billion in terms of sales revenue. The merger of the two giants in China's feed industry could achieve an annual sales target of RMB20 billion in revenue terms or 6 million tonnes in terms of feed production, placing it as the top feed manufacturer in China, second in Asia, and seventh largest in the world.