Consolidation of Chinese feed industry gains momentum
China produces 156 million tonnes of feed by about 11,000 feed enterprises. It is expected that this number will halve by 2020.
Consolidation of the Chinese feed industry is gaining speed. According to data from eFeedLink presented at ChinaVisions during VIV Asia in Bangkok by the end of 2005 some 15,000 feed enterprises operated in China.
Between 2007 and 2008 more than 2,700 firms went out of business and in 2009 more than 1,700 new enterprises were started.
The number of registered feed enterprises totalled about 11,000. By 2015 the total number of feed firms is expected to drop to 8,000 and to 6,000 by 2020.
Since the early 80s the integrated model, introduced by CP Group from Thailand, feed production, slaughtering and processing has been replicated throughout China. Various enterprises were set up following this model, such as Shandong Liuhe, Tang Ren Shen, Inner Mongolia Yili Industries and Sichuan Tong Wei.
Some took a different route via acquisitions. For example New Hope Group acquired Yunman Butterfly Spring Dairy to enter the cow breeding and dairy industry. It also acquired Beijing Qianxihe Food to enter the pig slaughter market.
The future of major feed processing enterprises would be geared towards operating on an integrated model that includes crop growing, breeding, feed production and slaughtering.
Small companies and SMEs which form the majority will enter into mergers to set up integrated enterprises.
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