Taiwanese entrepreneur conquers China’s piglet feed market

23-03-2012 | Home | Article

Fifty million sows – imagine how many piglets they produce. These, in turn, all have to be fed properly. Taiwanese piglet feed producer Anyou International acknowledged the enormous potential in the Chinese pig market and has now grown to become one of the country’s leaders in piglet feed. The end in market growth is nowhere near yet.

China as a country has been forging ahead rapidly in the last few years and it is well documented that GDP has been growing at around 8% per annum and in some years considerably more. The agricultural sector has also experienced profound changes in both the structure of the businesses involved and the level of inherent prosperity. The rise in GDP is almost synonymous with the rise in disposable income across the country and what this means is more consumer money spent on meat and a large proportion of this on pork products. The swine industry throughout China, which includes half of all of the world’s pigs of course, has responded rapidly to these wider economic drivers and there have been very significant changes.

Although there is still a considerable proportion of so-called ‘back-yard’ farms with a few sows each owned within families for home consumption and some external sales, there is a growing proportion of very large integrated businesses with many thousands of sows producing finished pigs for slaughter. These businesses are often linked directly to a feed company and in many cases also to processing operations and retail distribution.

These businesses are therefore very professional in their technical and business approach and they demand also a new level of professionalism from their suppliers. This has presented great challenge and opportunity for those companies that understand the market realities and that can deliver to the market what is required. One such area has been in piglet nutrition and as in many industries around the world technical managers and nutritionists find it difficult to construct cost-effective programs. It is however a highly specialist business in itself and knowledge of complex raw materials and raw material processing is critical.

Anyou International

One such specialist company that has risen to this challenge in China is Anyou International. Anyou have their main headquarters in Tainan City in Taiwan but their principal business is now in mainland China. The Chairman and owner of the company is Hung Ping and his wife Lily also plays an important role in the company organisation. In Taiwan there were a number of aspects to the business and this included production and sales of specialist raw materials such as extruded cereals and soybean products. Hung Ping was quick to realise in the mid-1990s that piglet nutritional technology that had basically been developed in the UK involving milk powder and cooked cereal inclusions, was ripe for taking into the Chinese markets.

Anyou International therefore built and established its first speciality piglet feed factory in Wuhan city to service the very large pig population in central China. This new business had immediate success and simply because of the quality put into the new piglet products, farmers and technical managers quickly realised that post-weaning growth could be lifted to levels previously unattainable in China. This, of course, relieves pig business managers from the on-going worry about post-weaning growth check and post-weaning diarrhoea and associated problems.

Anyou also quickly adapted proven European technologies for the control of gut health problems in young piglets. It was the understanding and appropriate application of the necessary technologies that was the key to the company’s success. This therefore may not be the cheapest way to feed young piglets, but it is well known in Europe and other parts of the world that by investing in the early life of the piglet in terms of quality feeds, this yields very significant returns through the whole life of the growing pig to slaughter. Producers in the Jiangsu and Hubei Province regions quickly saw the benefits of all of this and the word spread.

Anyou following the early success in the east of China, adopted the same business model in the other major swine producing provinces of China including Hubei, Hunan, Henan, Harbin, Yunnan, Guangdong, Shandong and Sichuan. In November 2011 the company had 17 factories across China and by the end of 2011 planned to have 20 in place. Anyou produces in total about 150,000 tonnes of piglet creep feeds every year out of a current market potential of about 1.3 million tonnes. With an industry having over 50 million sows, there are still many piglets in China not given a well formulated creep feed program.

Anyou also sell in total about 500,000 tonnes of finished feeds and this includes not only the creep feeds but also starter/grower feeds, sow feeds, concentrate products and premixes.

Joint ventures
The rapid expansion has included working with local provincial companies in joint ventures (JVs) to both speed up the process but also to facilitate rapid local growth within each region. Anyone nowadays working in the Chinese swine industry will tell you that Anyou has become an accepted market leader for piglet feeds because of the quality of product.

Hung Ping and his technical and R&D director Dr T.C. Wang are both highly committed to the swine industry and the development of new technologies. Dr Wang in fact was a PhD student in the UK with Dr Malcolm Fuller at the Rowett Research Institute working on the detail of amino acid metabolism and nutrition in pigs. They have now set up a forward looking research program of their own in China with a dedicated farm facility to carry out controlled feeding trials and a new laboratory and feed evaluation unit.

This new facility at Taicang near Shanghai is well worth a visit for anyone in the swine industry and there are lessons for us to appreciate in terms of the value of this type of investment.

China – the future

Without doubt, the Chinese pig industry will continue to develop. Some of the largest businesses have over four hundred thousand sows operating with the best technology in the world. FAO predicts that pork production and consumption will still continue to rise by about 5% annually worldwide and half of this will be in China itself. The companies that progress and flourish for the future will be companies like Anyou International, with a belief in new knowledge and the application of research and development.

They will also be companies who are prepared to invest back in the new technologies and who work closely with their customers towards common goals. This is reflected in the series of seminars and national conferences that Anyou established. There are usually over a thousand swine business directors and managers from all over China at these meetings and the quality of the technical discussions is as high as it gets. At the end of the day it has been a quality message that Anyou has delivered and this has been recognised by their customer base. AAF

The new Anyou Centre contains the company’s China HQ and administrative offices and a training centre with accommodation for either their own staff on short courses there or visiting customers. What is the most interesting feature of this new multi-million dollar investment is that on-site there is also an International Pig Museum. This has been built and set up to the highest standards for an exhibition centre of this type and covers many thousands of elements and items on display. I have certainly never seen such an exhibition site anywhere in the world. This part of the Anyou Centre reflects the total enthusiasm and optimistic outlook on the part of Hung Ping and his team in China. This centre provides a base for the technical and commercial teams and plays a valuable role in staff motivation and knowledge transfer.