June 16, 2010

AgFeed Industries Inc, one of the largest independent hog production and animal nutrient companies in China, announced Tuesday (Jun 15) an agreement on terms for the stocking of the first phase of the Xinyu production pod starting in the fourth quarter of 2010 with PIC (Pig Improvement Company), a division of Genus Plc.

This stocking will include 16,800 high health-breeding females and the Grand Parent stock to create a closed herd multiplication (CHM) system for maintaining high health production units.

AgFeed's production pod development in Xinyu is being pursued in partnership with local government as part of the strategy of AgFeed, Government & Farmer.  Phase one of this development includes three 5,000-head sow farms and a boar stud to support future growth.  Phase two of the Xinyu production pod will add two more 5,000-head sow farms bringing the total to 25,000 head, capable of producing over 550,000 market hogs annually.

Gerry Daignault, CEO of AgFeed's Hog Division, said: "This relationship will allow AgFeed access to PIC's world-renowned base of genetic material and expertise in sufficient quantity to allow us to meet our growth targets.  It represents another step forward in assuring that we will reach our goal of 2,000,000 market hogs by 2015."

Genus Plc creates advances in animal breeding through biotechnology and sells added value products for livestock farming and food producers. PIC, on the other hand, is the international leader in providing genetically superior pig breeding stock and technical support for maximising genetic potential to commercial pork producers.

AgFeed Industries is a US company with its primary operations in China. AgFeed has two profitable business lines - animal nutrients in premix, concentrates and complete feeds and hog production. AgFeed is one of China's largest commercial hog producers in terms of total annual hog production, as well as one of the largest premix feed companies in terms of revenues.

China is the world's largest hog producing country that produced over 645 million hogs in 2009, compared to approximately 100 million hogs produced annually in the US. China also has the world's largest consumer base for pork consumption. Over 62% of total meat consumed in China is pork. Hog production in China enjoys income tax free status. The feed markets in which AgFeed operates represent a US$20 billion segment of China's US$58 billion per year animal feed market.