Six of China’s largest poultry producers, including Shandong Yisheng Livestock & Poultry Breeding Co, Beidahuang Baoquanling Agriculture & Animal Husbandry Development Co., Shandong Minhe Animal Husbandry Co., Qingdao Kangdi Industry Co., Beindahuang Meat Industry Corp., and Zhong Chu Qin Corp., are partnering to launch a massive RMB6 billion (US$970 million) chicken breeding and processing operation in the city of Hegang, near the Russian border.
The project, which will be operated by the state-run Beidahuang Baoquanling, will breed white-feather chickens and will produce 700,000 tons of feed per year. Beidahuang is China’s largest agricultural conglomerate producing 6.3 million head of poultry per year, and operating 148 grain processing centers across the country. It also farms land overseas for grain and soybean production.
China is the world’s second biggest poultry producing country in terms of volume, but repeated avian flu outbreaks in both 1996 and 2013 have led to a drop in earnings in the industry. Despite this, in recent years both poultry consumption and production have been climbing, and government subsidies have spurred a flurry of consolidations resulting in regional, large scale, vertically integrated operations referred to a ‘dragon head’ firms.
The launch of the operation in Hegang follows a 2013 deal partnering Beidahuang Baoquanling with Shandong Minhe, Qingdao Kangdi, and Beidahuang Meat Industry Corp. in a RMB5 billion (US$810 million) poultry project designed to produce 1.2 million birds, 36,000 tons of meat, and 700,000 tons of feed per year.
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