Chinese businesses expanding to overseas markets
The total feed output in China rose 4 percent year over year to 169 million tons, accounting for around 20 percent of the global total and ranking number one in the world, according to the latest report from Research and Markets.
The output of pig feed topped the list at 62.1 million tons, up 4 percent year over year. The poultry feed output enjoyed the fastest growth, with output increasing 5 percent year over year to 49.8 million tons in 2011. The aquatic feed and ruminant feed saw low output, but aquatic feed witnessed larger growth space, said the report.
Currently, China has around 13,000 feed companies, most small, and over 20 percent of medium-sized feed companies have been acquired by large players. The top 10 feed manufacturers such as CP Group, New Hope Group, Wens, Zhenghong and TRS Group together occupy more than 30 percent market share by sales. In recent years, given that the large companies continually increase their production capacity to expand the market, the concentration degree of the feed industry in China will be enhanced, as well, according to Research and Markets. For instance, New Hope Group brought Liuhe into the listed company through asset integration in November 2011. After the reorganization, Liuhe contributes feed capacity of 9.45 million tons to the Group.
Additionally, Chinese enterprises are carrying out expansion in the overseas market. The third feed mill invested by Tongwei Co. Ltd. in Vietnam went into operation in June 2012. Haid Group, engaging in the production and sales of aquatic feed and aquaculture preparations, subscribed equities in Vietnam-based Panasia in December 2011, with shareholding ratio reaching 80 percent after the capital increase. New Hope Group plans to set up eight feed plants overseas annually after 2011, which will boast a capacity of 100,000–200,000 tons, and to double its overseas investment each year. Currently, 20 enterprises like New Hope, Tongwei Co. Ltd., Haid Group and Ningbo Tech-bank which have established plants in Vietnam make up 10 percent to 15 percent of the market share in the Vietnamese feed industry.