Two New Dairy Farm Projects in China 11-28-2022

Summary: In late Sept., Inner Mongolia approved a 12,000 cow farm for construction start-up; and Hubei started to build its largest dairy farming and processing base.

In late Sept., a 12,000 t/a head dairy cow "green farm" project by Inner Mongolia Xinggao Animal Husbandry Co., Ltd. was confirmed as receiving environmental approval. This company was founded in June, and is 51% owned by Inner Mongolia Xing Lian Xing Animal Husbandry Co., Ltd. (Green Farm means an Ecological Farm with waste recycling systems; currently, most farms being constructed farms are "ecological" since China issued the Guideline on Promoting Construction of Ecological Farms at the beginning of this year, which includes targets to build 1,000 national ecological farms and 10,000 local ones nationwide by 2025).

Project Disclosure:

  • Construction nature: New construction
  • Site area: 800,000 m2
  • Total investment: USD42.3 million (RMB300 million), 1.86% (USD0.8 million/RMB5.57 million) of which for environmental protection
  • Construction content: cattle shed, milking room, and other supporting facilities, such as manure drying areas and oxidation pond
  • Designed herd size: 12,000 head, comprising 6,000 milking cows, 1,800 calving/dry cows, 2,160 heifers, 2,040 calves
  • Estimated annual output: 54,000 t/a organic milk
  • Working system: 200 employees, two 12-hour shifts x 365 days per year
  • This farm will be in the Western Center of China Dairy Industrial Park of Dengkou County, Bayannur League, an area invested in by Mengniu, China Shengmu and other dairy businesses. Covering 1,600 ha, the Western Center is intended to include 13 dairy farms with 100,000 head of dairy cows in all. This is to require a total investment of USD669.1 million (RMB4.75 billion) and is expected to produce 1,500 t/d milk once all the farms are in operation. To date, 3 farms have been set up by China Modern Dairy Holdings Ltd., Dengkou County Yuanqian Animal Husbandry Co., Ltd. and Bayannur League Hemao Animal Husbandry Co., Ltd., with 12,000 dairy cattle introduced overall.

    Founded in May 2015, Inner Mongolia Xing Lian Xing Animal Husbandry Co., Ltd., has raised capital of USD7.0 million (RMB50 million) via equity replacement to aggregate around 7,000 cattle from small producers that almost went out of business in 2014–early 2016, the period regarded in the sector as "the Winter of China's Dairy Industry". By the end of 2021, it owned 17 farms and 35,177 head of cattle including 16,411 milking cows. In that year it producing 151,990 t of milk, achiving an averae yield of 10.39 tonnes per cow. The milk was recorded with 3.3% protein, 3.85% fat, aerobic plate count of 10,000 CFU/mL and somatic cell counts/SCC of below 200,000 CFU/mL.

On 25 Sept., Pastoral Song on Clouds (Xiangyang) International Agricultural Technology Co., Ltd. broke ground on a 10,000+ dairy cow smart industrial park in Nanzhang County, Xiangyang City in Hubei Province. This 80-ha park is to integrate dairy farming and dairy processing and is expected to cost USD169.0 million (RMB1.2 billion) to build - making it the largest such site in the province.

The total construction work is planned over 2 phases, closing in late 2023; once in full operation, it will bring around USD464.8 million (RMB3.3 billion) in annual sales revenue.

Construction plan:

  • Phase I: investing USD98.6 million (RMB700 million) in construction of dairy farm and forage base; estimated milk production of 90,000 t/a
  • Phase II: investing USD70.4 million (RMB500 million) in construction of dairy plant
  • Yan Liguo, chairman of the Hubei Dairy Association, said China's milk consumption per person per year is about 30 kg, which means Hubei needs to buy 1 million tonnes of milk from outside the province annually in order to meet local demand. This project will be very significanto in the development of the dairy industry in Hubei as well as China's middle region, given that most of the country's dairy businesses are still based on the North.

    The groundbreaking ceremony was attended by some major players like Mengniu, Yili, Bright Dairy and Royal Group who are confident in the development potential of the local dairy industry and consider this park  an effective solution to the shortfall in local milk production.

Source:CCM




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