New Hope Group Co., China's largest animal feed producer, will launch an overseas investment arm this month with international investors, including Singapore's sovereign wealth fund Temasek Holdings, New Hope Chairman Liu Yonghao said.
Other investors include grain industry giant Archer Daniels Midland Co. and Japan's Mitsui & Co., Liu said at an industry event in Hong Kong.
"The investment will focus on agricultural products and related businesses overseas and in China," Liu said.
Liu would not disclose the size of the fund but said details would be announced during the launch ceremony on November 21 in Beijing.
New Hope, China’s largest privately owned agricultural conglomerate, is the parent of Shenzhen-listed Sichuan New Hope Agribusiness Co Ltd.
Liu said the group already has a domestic agricultural fund, which had a first phase investment of 1 billion yuan ($157.6 million), and the fund had been doing well in the past year.
"China has 800 million farmers, of which 300-400 million are moving to cities," he said. "That will increase the demand for agricultural products while decrease the supply. This is positive to agricultural companies, like us."
The price of pork, a staple food product, has become a key driver of inflation in China and rising demand for the meat has also fuelled import from overseas, including from the United States.
New Hope has recently set up an overseas investment centre in Singapore to organize its investments in Southeast Asia, where New Hope has more than 10 animal feed plants and poultry farms.
"We plan to open 7-8 new plants each year in overseas, instead of 3-4 a year in the past few years," Liu said.
New Hope plans to set up plants and farms in Middle East, South Africa and central Europe.
The group will sell about 15 million tonnes of feedstock this year and consume about 10 million tonnes of corn in 2011, Liu estimated.