June 20, 2014


China - Update on recent industry developments (week ended June 20, 2014))



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    Yili Group cooperates with Tencent to develop e-commerce    
      New Hope Group partners Asiasea to enter seafood business
          Baiyang Group's aqua feed plant to be operational in Q1 2015
          New layer venture to be set up at Wuhan Biolake Science Park
          Ningbo Dairy Group to build new ruminant feed plant
      CP Group to invest in two Fujian ecological agricultural projects





Yili Group cooperates with Tencent to develop e-commerce    

Inner Mongolia Yili Industrial Group Co., Ltd. (Yili Group) and China's internet tech giant Tencent Group have reached a strategic cooperation agreement. The two companies will cooperate in the areas of marketing, online media, internet technology and sales platform, and explore business opportunities in the field of human health. 
Yili Group, a leading dairy company in China, produces and distributes a wide range of dairy products, including milk beverage, sorbet, ice cream, milk powder, milk tea powder, yoghurt and cheese.
Tencent is one of the biggest internet technology companies in the country with over 800 million subscribers for its QQ instant messaging service, as well as 396 million of WeChat mobile users in China and overseas. Tencent also provides cloud service to its users and has accumulated huge user data over the years, which will be helpful for consumer behaviour analysis and opens a quick channel to reach a large online audience.     
Yili Group says the cooperation with Tencent marks an important step for the company to develop e-commerce and the two companies will explore more opportunities for cooperation, especially in O2O (online to offline) business.


New Hope Group partners Asiasea to enter seafood business              

New Hope Group, a leading supplier of meat, egg and dairy products in China, has signed a strategic cooperation framework agreement with Asiasea (Dalian) Seafood Co., Ltd. (Asiasea), marking the group's entrance into the seafood business.
According to the agreement, the two companies will cooperate on the streamlining of supply channels, product development and sharing of information. However, the two companies did not reveal the amount of investment that New Hope Group plans to make in the new business.
Asiasea is the largest seafood supplier in China. The company processes 80,000 tonnes of seafood per year and supplies products to over 20,000 restaurants and supermarkets across the country. 
With annual sales of US$8.8 billion, New Hope Group is the largest agricultural enterprise in China.


Baiyang Group's aqua feed plant to be operational in Q1 2015  

Baiyang Aquatic Group, Inc. is expecting its Mingyang Aquatic Feed Processing Plant in Liaoning to be operational in the first quarter of 2015.
The plant will feature nine production lines, five of which are for extruded fish feed, two for pellet fish feed and two for shrimp feed.
Baiyang Group started the project with an initial investment of RMB88.50 million (US$14.17 million). In May 2013, the company increased the investment by RMB53.12 million (US$8.51 million) with an aim to expand the designed capacity to 220,000 tonnes from 120,000 tonnes.
Baiyang Group owns seven aquatic product processing subsidiaries in Guangdong, Guangxi and Hainan province. In the first quarter of 2014, the company realised operating income of RMB212 million (US$33.98 million), an increase of 29% on-year, while net profit rose by 11% on-year to RMB4.55 million (US$729,360.47).

New layer venture to be set up at Wuhan Biolake Science Park 

Wuhan High-tech Agricultural Group, Denmark's Dueholm Organic Foods Co., Ltd. and Hubei Haoxin Investment Co., Ltd. have jointly invested in a layer project at Wuhan Biolake Science Park.
The three companies invested RMB60 million (US$9.59 million) to set up a joint venture, China-Denmark Wuhan Dueholm Organic Production Company Ltd..
The venture will import Danish layer production equipment and build 10 organic layer farms in Hubei province. When fully operational, the layer venture is expected to generate an annual output value of RMB1 billion (US$159.86 million).


Ningbo Dairy Group to build new ruminant feed plant   

Ningbo Dairy Group Co., Ltd. is planning the construction of a feed plant for its dairy operation.
The feed plant, which will feature production equipment from South Korea, will provide total mixed ration (TMR) feed to all the dairy cows at the company's farms.
Ningbo Dairy Group owns and operates 26 dairy farms. The largest one, based in Hangzhouwan District, Ningbo city, spans 6,000 Mu (400 hectares) and boasts an inventory of 4,000 head of Holstein cows, 40% of which were imported from Australia.            



CP Group to invest in two Fujian ecological agricultural projects 

CP Group plans to invest RMB2.05 billion (US$329.23 million) in two ecological agricultural projects in Nanping city, Fujian province.
The group will invest a total of RMB1.5 billion (US$ 241.08 million) in Pucheng county over the next five years in one project, which will include a waste reutilization demonstration park, an ecological agricultural high-tech demonstration park, a food processing industrial park and a cold chain logistics.
In addition to the first project, the group will also invest RMB550 million (US$88.39 million) in an ecological livestock farming project in Yanping District.


* 1 hectare (10,000 sq. meters) =15 Mu
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