September 25, 2020
IFC mulls US$80 million loan to 'multi-storey' Chinese swine producer
International Finance Corporation (IFC), a member of the World Bank Group, is considering a 560 million yuan (US$80 million) loan to Chinese swine producer Guangxi Yangxiang Co Ltd (Yangxiang), DealStreetAsia reported.
In 2018, Reuters reported that the company was running two seven-floor sow breeding operations, and is putting up four more, including one with as many as 13 floors that will be the "world's tallest building of its kind".
The proposed loan will help finance the expansion of Yangxiang's swine breeding and farming capacity and its ancillary facilities in Guangxi province. The company estimates that the cost of the expansion will be about US$264 million.
This is not the first time IFC is financing the company. In 2016, IFC extended a US$50 million loan to help finance the expansion of its stock sows and the hiring of contract farmers to raise two million pigs.
"IFC's long-term loan is much needed by the company to improve its debt maturity profile and mitigate sector cyclicality in major expansions," IFC says.
IFC also noted how Yangxiang implemented innovations in African swine flu (ASF) prevention and recovery. It aims to bring these practices to other industry players in Asia.
"IFC will support the company's continuous efforts in obtaining higher standards in animal welfare and responsible use of antibiotics to make demonstration effects in the industry," IFC adds.
The proposed financing also serves as a seal of approval for the company's planned public listing, IFC said in its disclosure. It, however, did not provide details about Yangxiang's capital market plans.
Yang, the company founder, directly and indirectly owns 42.56% of the company. The other shareholders are the employee-owned funds, 46 individual shareholders, Continental Feed, and two university funds.
In April, IFC also proposed a US$150 million loan to Chinese swine producer Muyuan Foods Co to help finance the construction of 10 new swine farms, mostly in the border regions of China.