subject: Research Report On Chinese Feed Industry, 2009-2010 - Aarkstore Enterprise [print this page] As the material foundation of the modern animal husbandry and the aquiculture industry, the feed industry is directly related to the improvement of agriculture and peoples living standard. It has become one of the important basic industries in Chinese national economy. The increase in feed production mainly comes from those regions with rising population and personal income and accelerating urbanization process.
With many years development, Chinese feed industry has set up the complete feed industrial system integrated with the feed processing, feed additive, feed raw material and feed machinery manufacturing industries as well as feed research, education, standard and examination. In 2008, Chinese feed market scale was about RMB 400 billion.
In 2008, Chinese industrial feed production, compound feed production, concentrated feed production and feed additive premix production amounted to 137 million tons, 105.90 million tons, 25.31 million tons and 5.46 million tons, rising by 10.83% YOY, 13.64% YOY, 1.58% YOY and 4.79% YOY respectively.
In 2008, the production of compound feed, concentrated feed and feed additive premix accounted for 77.5%, 18.5% and 4% of the total feed production separately. The proportion of compound feed production was further improved with the YOY growth of 1.5% while the proportion of concentrated feed production was reduced slightly and the proportion of feed additive premix production remained unchanged.
Presently, there is severe overcapacity in Chinese feed industry with the equipment utilization rate below 50%. There are over 10,000 feed producers in China, but the annual production of one feed producer is even less than 10,000 tons. As a result, Chinese feed market can only support 1,000 feed enterprises at most considering the increase in Chinese total feed production, the lowest production of feed enterprises and the productivity-led market distribution. According to international experience, there will be only several hundreds of feed enterprises in China in the future. Feed enterprises are forced to adjust their strategies (larger scale, more perfect industry chain and complete value chain) to reduce production, sales and management costs for survival. Large scale has been the indispensable survival condition for enterprises. In 2008, the number of Chinese feed enterprises was reduced by over 1,000 YOY. In the following 3-5 years, the feed enterprise number will continue to decrease while the market concentration will be improved, leading to M&A and reorganization in this industry.
