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Good Way to Become Rich in China is Enter Animal-Feed Business

| May 12, 2016 09:44 AM EDT

Pig Breeders To Get Subsidies In Jilin Province

Because less than 20 percent of livestock farming companies in China produce their own feed, 80 to 90 percent of animal farm raisers depend on feed companies. An agricultural analyst pointed out that business-oriented people who want to get rich in China should go into the animal-feed business.

The only way not to grow and prosper in the animal feed industry is suffer from an internal management problem, said Wang Qian, analyst at Guotai Junan Securities, based in Shanghai.

The demand for feed, in turn, is fueled by bigger demand for higher-quality meat as clamor for pork, chicken and beef constantly go up due to economic progress. The higher demand was accompanied by efforts to depend less on lower-priced but low-protein staples such as soybeans, corn and rice as animal feed.

Proof of how profitable the animal-feed industry in China is are two men who had become billionaires because of their animal-feed enterprises, reported Bloomberg. One is Bao Hongxing, CEO of Twins Group, with a net worth of $1.8 billion. The other one is Chen Yuxin, founder of Sichuan Tequ Investment, with an estimated wealth of over $1 billion. Twins Group is the fifth-largest animal-feed producer in China.

With a population of more than 1 billion people and growing demand for meat, China has become the world’s largest animal feed manufacturer, said the Ministry of Agriculture. But while the big feed makers are expanding exponentially, smaller firms had contracted to only 6,000 currently from 10,000 in 2010 as family-owned companies closed.

As expected, meat consumption in China grew to 691 calories in daily diet from only 125 calories in 1971. For the 10-year-period 2003 t0 2013, meat consumption jumped 25 percent, reported Takepart.

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