November 24, 2008


China - Update on recent industry developments (week ended Nov 21, 2008)



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            Singapore Food Industry rears swines in Jilin, China
        Dalian fishmeal industry modernised
            Huge supply gap of milk cow feed in Shandong
            Chia Tai Group constructs new facilities in Henan
            Henan's broiler exports may hit 750 tonnes
          Hubei builds first egg processing factory  



Singapore Food Industry rears swines in Jilin, China

Singapore Food Industry (SIF) will soon set up a swine farm in Jilin province, northeast of China.

This is one of the exploring projects in the Singapore-China Free Trade Agreement signed in October. Recently, a subsidiary company of SIF had signed an agreement with the Jilin provincial government in a joint venture to build a modernized agri-food industrial park in Yongji, Jilin province.

The first project of the industry park was to construct a modern swine farm. Mr Roger Yeo Kok Tong, Chief Executive Officer of SIF said that this will become an alternative source of pork for Singaporeans.

According to reports, the swine farm in Jilin will be able to supply Singapore 5 o 10 percent of her pork consumption. Currently, Singapore imports pork mainly from Brazil, Australia and Indonesia.

Mr Yeo said that setting up the swine farm in the grain production region of China will help to save up substantially on production costs.



Dalian fishmeal industry modernised

All 14 traditional fishmeal factories in Lushunkou, Dalian, Liaoning province have been replaced by large-scale modern fishmeal production plants recently.

A total of RMB 130 million has been invested to build these new plants. These factories will be able to process all the 200,000 tonnes of low quality fish caught in the area annually.

The government said that the move would help to resolve the long exsiting pollution problem caused by the traditional fishmeal factories.

Located at the southern end of the Liaodong Peninsula, Lushunkou nets some 200,000 tonnes of low quality fish yearly, in addition to its bountiful ocean harvest.  Small-scale fishmeal factories therefore grew rapidly in the area. The side effect was the water pollution caused by these small-scale producers which could not meet environmental standards with their outdated facilities.



Huge supply gap of milk cow feed in Shandong

Based on the amount of milk produced in Shandong, the province requires about 2 million tonnes of dairy cow feed annually. However, Shandong produces only 150,000 tonnes of such feed. Most of the animal feed used were either imported from other provinces or mixed by the farmers themselves.

The development of the ruminant feed industry over past few years was unproportionate to the advancement of the ruminant husbandry in Shandong. While the province's ruminant feed production in 2007 grew 25.8 percent to 299,200 tonnes on-year, it was only 2.2 percent of the province's total feed production. Meanwhile, feed production for dairy cows increased 26.1 percent on-year only to reach 150,000 tonnes.

That the dairy cow sector of the livestock industry was relatively new to the province was the main cause for this feed supply gap, reasoned market players. In Shandong, there are few producers who specialize in the production of ruminant feed and even fewer in dairy cow feed.


Chia Tai Group constructs new facilities in Henan

Chia Tai Group have recently signed a strategic cooperation framework agreement with Henan government to expand the province's husbandry industry.

According to the agreement, CP Group will build the following facilities: a hog farming cum slaughtering house with an annual output of 1 million hogs, a broiler farming cum slaughtering house with an annual output of 50 million broilers, a layer farm with egg processing facility with an inventory of 1 million layers and a farm with rearing layers and crocodiles. 

The agreement also states that the company will also expand and upgrade the technology of its five existing feed mills.



Henan's broiler exports may hit 750 tonnes

Henan's broiler exports jumped 9 times on-month to reach 581.2 tonnes with its worth leaping by over 11 times to US$268.3 million.

Henan Yongda Food Corporation and Henan Dayong Industrial Co.,Ltd resumed their broiler exports to Japan last month and passed the random safety inspections conducted by the Japanese authority.

According to the exports orders, broiler exports of the province will likely reach 750 tonnes this month, a buoyant rebound after the melamine contaminated issue.



Hubei builds first egg processing factory

Hubei Shendi Agricultural Technological Trade started the construction of its RMB280 million egg processing plant on November 18.  The factory is scheduled to commence operation next year.

This first egg processing production line will change the egg industry landscape of Hubei which used to produce only fresh eggs. Statistics show that demand by egg products makes up 33 percent of U.S's and 50 percent of Japan's total egg consumption; however, in China, this is only 5 percent of the total egg demand.

Meanwhile, Shendi's research collaboration with China Agricultural University to extract bacteriolysin from egg white has been accredited by the local science and technology department early this year.

The anti-inflammatory medicinal effect and preservatory property of bacteriolysin is what makes the antibacterial antibody commercially valuable. 500 tonnes of eggs are required to extract one tonne of bacteriolysin which is then sold for about RMB4.5 million in the global market.

For the past two years the company has spent more than RMB 2 million on the research, according to Mr Yang Yan, the company CEO.

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