China Everbright Limited (CEL) announced that its RMB Mezzanine Fund II has made an undisclosed equity investment in Sichuan Dekang Agriculture Technology Limited (Sichuan Dekang) – Chinese hog and chicken farming operation.
Founded in 2006 by Chen Yuxin, the founder and chairman of Huaxi Hope Group, and Wang Degen, president of Huaxi Hope Group, Sichuan Dekang is one of the largest livestock farming companies in Southwest China, specializing in hog farming with hog breeds sourced from Canada, and premium chicken production. Employing modern technology, a highly-controlled computerized management system, and an intelligent genetic breeding program, the company provides high-quality swine breeds to China’s hog farming industry from its more than 30 farming subsidiaries.
Founded in Hong Kong in 1997, China Everbright pursues a strategy of “Macro Asset Management” with a focus on cross-border asset management and investment businesses, according to the firm’s website. Through its private equity funds, venture capital funds, hedge funds, mezzanine funds, and principal investment funds, China Everbright Limited invests in companies in both mainland China and overseas that possess potential for rapid growth.
“Hope Group runs one of the most successful businesses in China. Having set up a number of successful companies, they have catered to consumers’ need for better environment, safer food and higher-quality consumer products,” said Chen Shuang, Chief Executive Officer of China Everbright Limited.
Following the closing of the deal, China Everbright will be actively involved in Sichuan Dekang’s bolt-on acquisitions, financing activities, and integration of modern corporate governance with the goal of driving Sichuan Dekang into the modern agricultural space according to China Everbright.
“We welcome CEL to become an important shareholder of Sichuan Dekang and a strategic partner, and highly recognize its excellent brand name and financial capabilities. CEL’s rich experience in corporate governance, finance and capital market will help us become a world-class agriculture and food company,” said Mr. Wang.
In order to gain market share in China’s pork sector, the country’s producers will need such governance and guidance.
In March of this year, China’s pork imports doubled compared to March 2015, to a record 114,700 tons, according to Global Meat News, as China’s more stringent environmental regulations caused a slow-down in hog production.
“…as I understand it, there are new restrictions on locating large-scale pig farms near population centers or rivers,” Stephen Howarth, Market Intelligence Manager for the UK levy board, AHDB Pork told Global Meat News. “This has meant some producers have had to shut down or relocate. On top of this, many of the small backyard producers have stopped production and there is little sign of them coming back.”
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Lynda Kiernan
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