subject: AgFeed Industries, Inc. (NASDAQ: FEED) $142M (MarketCap) Getting Bigger [print this page] AgFeed Industries, IncAgFeed Industries, Inc. (NASDAQ: FEED) $142M (MarketCap) Getting Bigger
AgFeed Industries has signed the first in a series of agreements with Genus Plc., a worldwide biotech company that applies its non-genetically modified organism technology to bovine and porcine farming sectors. This stocking agreement will include more than 16K high health-breeding females to create the closed heard multiplication system available in China for maintaining high health production units.
AgFeed's production pod development in Xinyu, as previously announced, is being pursued in partnership with local government as part of the strategy of AgFeed, Government & Farmer. Phase one of this development includes three 5,000 head sow farms and a boar stud to support future growth. Phase two of the Xinyu production pod will add two more 5K head sow farms bringing the Xinyu total to 25K, capable of producing over 550K market hogs annually.
AgFeed has two profitable business lines - animal nutrients in premix, concentrates and complete feeds and hog production FEED is also the largest commercial hog producer and the largest premix feed company in China. The company owns and operates thirty commercial hog farms and five premix feed plants in south China.
The real story here is in the significance of the role hog farmers make in China's market and how demand can make AgFeed an even larger provider. The feed markets in which AgFeed operates represent a $20 billion segment of China's $58 billion per year animal feed market. China is easily the world's largest hog producing country having farmed and sold over 645 million hogs last year (the U.S. pales in comparison with only 100 million hogs produced here annually). Further, the chef eats his own cooking; China boasts the world's largest consumer base of pork consumption with over 62% of total meat coming from the swine.
Gerry Diagnault, the chief executive officer of AgFeed's Hog Division wants to meet growth targets of producing 2 million market hogs by 2015, and it seems the industry is ripe to support those levels.
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