December 5, 2006


China's New Hope mulls centralised purchasing of feed raw materials



New Hope Group's raw materials committee meeting, held in Chengdu, China from November 24 to 27, was a discussion to assess the group's resources and to discuss the issue of centralised purchasing in the sprawling group.


The committee identified the need for a systematic and practical approach to central purchasing and tried to foresee the problems such a system would pose. 


Liu Yonghao, director of New Hope Group said that as China's purchasing system has been liberalised, the state's ability to regulate the raw materials market has been diminished and market forces has played a bigger role in determining prices. While the industry is still in the process of building a comprehensive purchasing system, higher energy prices in international markets and the subsequent drain in grain supplies caused by the biofuel industries has exerted an influence on feed prices, he added.


While China's overall economy continues to register strong growth, the country's agricultural sector has been left behind. The agricultural industry should make increasing productivity a priority, he said.


Liu said New Hope, leveraging on its strong branding, capital and technical capabilities would continue to partake strongly in this development.  


New Hope Group recently said it would devote the major part of a new RMB1 billion (US$128 million) investment to the livestock sector.