COFCO Launches Pig Feeding Trust
COFCO Trust launches China's first pig feeding trust, and there are more choices in the investment in China's livestock industry.
Online PR News – 13-July-2012 – beijing – A new form of investment in livestock breeding industry appears in China. Recently, COFCO Meat Investment Co., Ltd. (COFCO Meat) and COFCO Trust Co., Ltd. (COFCO Trust), both of which are subsidiaries of China's largest food manufacturer and trader COFCO (China National Cereals, Oils and Foodstuffs Corporation), have cooperated to launch a new financial investment product–trust for scaled pig feeding–in Dongtai City, Jiangsu Province, according to CCM’s June issue of AgriChina Investor.
This mode carried out by COFCO Meat and COFCO Trust could be extended to a new one, the so-called "Enterprise + Base + Farmer + Financial Institute". In this improved mode, farmers (or private companies) feed pigs; COFCO Trust (or other trust companies) provides capital and COFCO Meat offers breeding technology and administration.
Recently, livestock breeding is a hot field attracting many financial investors and those in other industries. For example, in 2009, Ding Lei, founder and CEO of the leading China-based Internet technology company NetEase.com Inc., proposed his idea of a pig breeding project, arousing great public concerns. Legend Holdings Ltd., China's top PC manufacturer, established an agricultural business department in 2010 and initiated its strategic investment in agricultural industry in 2011. In March 2012, Wuhan Iron and Steel (Group) Corporation, a state-owned steel super giant located in Central China, disclosed its plan to build a pig farm. Later on 11 June, 2012, Shanxi Coking Coal (Group) Corporation, China's largest coking coal supplier, signed a strategic contract with Shuanghui Group to cooperate in pig slaughtering.
COFCO Trust's pig feeding trust is an innovative product of investment in pig breeding industry. But whatever the investment form is, there are risks in pig breeding industry. Firstly, pork price fluctuates frequently and it is hard to be forecasted, and thus it's hard to ensure the profit level, although sometimes it is relatively high. Secondly, it's hard to precisely control the cost, as feedstuff price also fluctuates frequently. Thirdly, pig breeding needs relevant technologies, which are not easy for new comers to master.
Source: AgriChina Investor 1206
Content of AgriChina Investor 1206:
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