August 5, 2008


Goldman Sachs acquires China pig farms for US$300 million

US private equity investment firm Goldman Sachs has acquired full control of more than 10 pig farms in China for US$300 million, establishing a presence in the Chinese livestock industry, according to newspaper China Business.


The farms are located in the provinces of Hunan and Fujian. China Business said Goldman Sachs bought the farms outright but was not involved in daily operations, which are outsourced to third parties, and that the company only maintained control of livestock price.


The investment sparked concerns amid global food price crisis and after the Doha round talks collapsed on the thorny issue of agriculture. Investor Jim Rogers said the most valuable investments in China are agricultural products.


The news came as the People's Bank of China increased commercial banks' loan allocations by 5 percent to boost capital flows to lower-rung workers and farmers.


Goldman Sachs already has a 13 percent stake in China Yurun Food Group, a Hong Kong-listed meat products manufacturer. Goldman Sachs also owns a 60 percent stake in Shuanghui Investment and Development, which competes with China Yurun in the retail packet meat market.


Jiang Hua, chief capital operating officer at investment firm Shanghai Homeby Group said it is natural for Goldman Sachs to invest in poultry farms as it has already invested in meat processing and branding.

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