August 1, 2011


Chinese companies step up investment in hog farming


Ten major companies in China have made high-profile announcements of investments in pork production over the past year, according to reports.


The companies include agricultural businesses, along with a real estate developer, internet firm and investment bank also among the newcomers. Internet portal NetEase CEO Ding Lei said in March it will build a hog-raising farm in Zhejiang province, with a total investment of up to RMB300 million (US$46 million).


Liu Yuande, vice president of a Guangzhou-based property firm Mayland Group, earlier this month invested RMB150 million (US$23 million) to build a hog-raising farm in the city. Liu said compared to the overheated real estate sector that has been under government curbs, increased government subsidies for hog-raising has made the business more attractive.


The State Council said on July 13 that farmers and companies will receive a RMB100 (US$15) subsidy for every sow they raise.


The business has also been winning favour from institutional investors. China International Capital Corp, the country's largest investment bank, and venture fund Legend Capital have separately made equity investments in hog-raising companies.


According to the National Bureau of Statistics, pork prices rose 57.1% on-year in June and contributed 1.37 percentage points to the consumer price index in the month, which hit a three-year high at 6.4%.

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