AgFeed Industries, an independent hog production and animal nutrient company in China has formed a joint venture with M2P2, a US hog production and industry management consulting company.
The new company, AgFeed International Protein Technology Corp. will focus on enhancing hog production systems for Chinese and other Pan Asian clients based on modern western standards to increase productivity and ensure the highest bio-security health standards in the Pan Asian hog industry. The joint venture was formed to take advantage of the coming commercialisation and consolidation of the hog industry being fostered by the Chinese central and local governments. The joint venture commenced operations on July 13, 2009 and AgFeed Industries is the joint venture's first client.
Glenn McClelland, Chief Executive Officer of M2P2, has been appointed to serve as the President of AgFeed International Protein Technology. The new company will be owned 80.1% by AgFeed Industries and certain affiliates and 19.9% by M2P2.
Alternative sources of pork
"The demand for alternative sources of pork is predicted to increase by 45% by 2015 according to China's National Bureau of Statistics," commented Junhong Xiong, AgFeed Industries' Chief Executive Officer. "The Government's rural to urban policy coupled with the new food safety laws will reduce the role of the farms raising less than 100 hogs and the increasing demand for pork will only be able to be met by accelerating the commercialisation of the hog industry."
In describing the joint venture's initial plans, Gerard Daignault, AgFeed Industries' Chief Operating Officer, stated that "the joint venture will advise AgFeed Industries in building two initial beta-sites on two 600 plus acre sites, one in Gao'an City, Jiangxi Province, China, 50 miles southwest of Nanchang, and the other in Dahua City, Guangxi Province in southern China. At both locations, AgFeed Industries will build 5,000 head sow farms designed as pristine modern facilities with a combined output of 225,000 to 250,000 animals annually.
Western style production
“M2P2's personnel working through the joint venture will assist in the design, engineering and construction of the facilities. M2P2 will train Chinese farm managers on M2P2 farms in the US Midwest on the western style of production. The joint venture will then leverage the success of this initial program to build additional large farms for AgFeed Industries and extend its services to international companies seeking entrance into the Pan Asian markets."