A new form of investment in
livestock breeding industry appears in China
According to introduction of the
pig feeding trust on the official website of COFCO Trust, the total trust
capital is USD2.38 million (RMB15 million), and investors can get float return
by the end of the 12-month duration of trust.
Outside investors could subscribe
to this financial trust product (one contract referring to a piglet with weight
of about 20kg ) via COFCO Trust.
COFCO Trust entrusts COFCO Meat as investment management agent to manage, care
for and fatten pigs, with all the relevant expenses burdened by the trust
capital. The fattened pigs (about 100kg
each) will be sold at market price, with earnings regarded as trust return.
This trust product is innovative,
as this is the first one related to pig feeding and it is a kind of financial
investment in a real commodity. On 20 June, 2012, COFCO Trust expressed that
the first session of trust has been completed and the ROI was about 6%; the
second session of pig feeding trust will be launched in the future.
COFCO Trust expressed that COFCO
Meat could concentrate resources and power into the core steps of the
industrial chain such as the culture of breeding pigs while introducing outside
resources and capital to take part in other secondary steps such as caring,
fattening and fattened pig sales.
This mode carried out by COFCO
Meat and COFCO Trust could be extended to a new one, the so-called "Enterprise
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 Central China , disclosed its plan
to build a pig farm. Later on 11 June, 2012, Shanxi Coking Coal (Group)
Corporation, China
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:
Huiyuan and BOBC join hands for
organic agricultural business
Jiuding Capital invests in
another agricultural company
China Soft Capital invests in
agricultural informatization solution
Taobao unveils online shopping
platform for agricultural produces
COFCO Trust launches China
Guangdong Tiandi Food to seek IPO
in the near future
Farmland problem: not only
quantity but also quality
Brief introduction to China
Rural area becomes key point in
Water Conservancy Planning 2011-2015
Yurun launches two million pig
slaughtering and processing plant in Hainan
……
AgriChina Investor, periodically published on 25th every month, offers
timely update and close follow up of agriculture
investment in China
If you are interested in AgriChina Investor, please do not
hesitate to contact us by +86-20-37616606, or email us at econtact@cnchemicals.com.
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