China invests in huge Argentinean pork project

17-08-2020 | |
Illustration: Shutterstock
Illustration: Shutterstock

China is about to embark on a multi-billion dollar project to almost double Argentina’s pork production over the next 4 years.

That was shared recently by Argentina’s Ministry of Foreign Affairs, International Trade and Worship. The Latin American country is about to receive almost US$ 3.8 billion of investments.

The agreement, which is set to be closed shortly, aims to add 300,000 sows to Argentina’s herd, which will mean an almost doubling of the commercial meat production. It would generate exports for US$ 2,500 annually. In the 1st year, 60,000 sows will be added and in the 3 following years, another 80,000 will follow.

  • Illustration: Shutterstock

    Illustration: Shutterstock

ASF reducing pork supplies in China

There is a strong Chinese interest to invest in Argentina’s pork sector, as the country is looking for ways to rebuild its meat stocks after the drastic cut of their supply due to African Swine Fever (ASF). The Foreign Ministry’s report stated that the project “is adapted to comply with environmental requirements and guarantees regarding sanitary status inside establishments.”

The proposal includes the development of 25 integrated units of 12,000 sows each, which will require an investment of US$ 151 million for each. It includes balanced feed manufacturing plants, biodigesters (generation of energy and bio-fertiliser), full cycle breeding, export-licensed slaughterhouses, processing without the use of an effluent lake as well as customs offices.

Argentina’s pig business is breaking records
Argentina may be the world’s 8th-largest country – but in terms of pig production it has been a relatively small player. Things however are set to change…

Producing pork for the Chinese market

The units are expected to produce 882,000 tonnes of pork that will be destined to Chinese market, worth US$ 2,500 million. In addition, the entire project will provide a job for 9,500 workers and require 3.6 million tonnes of grain for animal feed.

The Foreign Ministry’s report stated: “The dynamics and potential of Argentina’s pork production support its excellent sanitary conditions and abundance of grain availability, which in competitive terms represents between 50% and 75% of production costs.”

How did Argentina’s pig inventory develop over the decades?
Check the global pig statistics tool

Size of Argentina’s pig industry

Argentina’s pork production is currently close to 700,000 tonnes, up 250% higher from the volume produced in 2009. In total, there are 3,855 commercial farms with 350,000 sows in total, as well more than 600,000 sows in backyard or non-commercial productions.

The authorities’ document remarked that “the expected rate of return is 21.3% and a 7-year repayment term for the investment.” In addition, the agreement previews an “exchange of scientific research and agricultural technology in the pig sector; animal health; and investments and trade in the sector.”

Join 18,000+ subscribers

Subscribe to our newsletter to stay updated about all the need-to-know content in the pigsector, three times a week.
Daniel Azevedo Freelance journalist Brazil