August 12, 2008

 

Nanjing's real estate companies jump on the pig breeding bandwagon

While it is getting to be the norm for real estate agencies in China to encroach on agricultural lands and convert it into industrial areas, real estate developers in Nanjing city, eastern China, are investing in pig breeding.

 

Tight monetary policies and restrictions on real estate development have prompted at least 10 real estate developers in the city to move into pig breeding, according to the local agriculture and forestry administration bureau in Nanjing,

 

While house sales are lacklustre this year, pig prices are at record highs, prompting real estate developers, with money and land on their hands, to invest in pig breeding.

 

Moreover, generous subsidies and preferential policies by the local government for pig breeding have made it easier for the companies to invest in the industry.

 

The companies are also relatively safe from the high-risks associated with pig breeding, especially pig disease outbreaks: the companies only have to pay RMB 12, which is 20 percent of the insurance premium to get a pig insured for RMB 1,000 per head.

 

Moreover, the Nanjing city government provides a subsidy of RMB 100 per square metre for the construction of standard pig farms with over 1,000 pigs marketed annually.

 

Futeng Real Estate Development Co., the first company to extend its business into pig breeding last year, has put more than RMB 200 million (US$29.1 million) into this sector.

 

Its first foray into pig farming was a joint project with Nanjing Agricultural University near Xuzhou with a total investment of RMB 20 million (US$2.91 million ).

 

Now, it is making plans for a dozen farms in the same city.

 

Futeng is also spending RMB 200 million in constructing a pig farm and a RMB 12 million breeding farm in the same province.

 

Others include the Nanjing Kangfa Group, which is putting RMB 50 million in building standard piggeries in Tangshan and Hushu and the Jindongcheng Group.