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For the past 30 years, the government of China has recognized the Charoen Pokphand Group’s (CP) investment in the development of the country’s agriculture based on its ‘3-Benefit Philosophy’ of benefiting the country, the society and the company wherever it operates. Under the ‘12th Five-Year Plan’ announced by the Chinese government, CP has been tasked by the Chinese government to initiate modern agricultural changes to the nation’s traditional farming sector by introducing fully integrated agribusiness systems. Mr. Dhanin Chearavanont, Chairman and CEO of the Charoen Pokphand Group stated:
“CP’s investment in China focuses mainly upon agriculture. Whether it is producing animal feed, or raising livestock such as pigs, the latest technology and management systems are utilized. In the past 30 years, both the Chinese government and CP have undergone considerable collaboration efforts because the nation’s leadership understands the importance of agricultural development. The significant changes that we had witnessed in the last 30 years will again present itself today as Mr. Hu Jintao, President of the People’s Republic of China, has issued a new policy to establish ‘New Agricultural Villages’ to raise the income level of farmers. This policy will seek to strengthen China and CP is readily prepared to work in partnership with the Chinese government in developing ‘New Agricultural Villages’.”
The ‘Modern Agricultural Village’ project which is also known as the ‘Xinnongchun Project’ is one such initiative created under the ‘New Agriculture’ policy. This initiative brings together four different parties that represent each modern farming project; the government, private enterprise, bank and farmers.
Since 2009, CP had collaborated with the government of China to establish different kinds of ‘Xinnongchun’ projects with Pinggu city being the first. The project located in Pinggu city in the province of Beijing allowed for CP to build an advanced broiler facility with the capacity to produce 3 million broiler chickens annually with an investment of approximately RMB 582 to 615 million as well as introduce a totally integrated farming system that includes quality chicken breed and animal breed, processing and renewable energy systems (biogas). The parties involved for this project consisted of farmers who had formed a cooperative, the support of the Chinese government who provided an investment of 15%, CP who provided and investment of 15% and the bank who provided 70% investment in the form of loans.
The company had also signed an MOU with the provincial government of Jilin with an investment totaling RMB 7,900 million that will consist of farming 3 million broilers, 1 million swine and 100 million chickens for meat per year. In addition, the ‘Xinnongchun’ project in Zhanjiang city in the province of Guangdong will farm 1 million swine and 100 million chickens for meat per year as well as aquaculture with a total investment of RMB 8,000 million.
Furthermore, the Chinese government had recently signed a contract CP to grant the company with an opportunity to commence an intensive and mixed farming project that focuses on horticulture and livestock farming, in Cixi city of Zhejiang province. Initial investment for this project is approximately RMB 4,000-5,000 million.
The project will see CP develop 12.8 km2 of farm land that will become a fully integrated and modern agricultural site located on reclaimed coastal property on the outskirts of the city. As Cixi city is surrounded by numerous large cities such as Shanghai, Hangzhou and Ningbo, the government of People’s Republic of China had chosen the city to become the area’s food production site for city dwellers that represent over 100 million people.
In the near future, once CP has concluded discussions and studies regarding mega farms and more metropolitan agricultural projects, the company will seek to launch more projects in Xinjiang, Liaoning, Tianjin and Beijing in the People’s Republic of China.
Charoen Pokphand Group
