China's New Hope to set up overseas investment fund

Reuters | 16 November 2011
China's largest animal feed producer will launch an overseas fund this month with international investors, including Singapore's Temasek Holdings, that will set up farms in the Middle East, South Africa and central Europe.

By Alison Leung

(Reuters) - New Hope Group Co Ltd, China's largest animal feed producer, will launch an overseas fund this month with international investors, including Singapore's Temasek Holdings Pte Ltd, President Liu Yonghao said.

Confirmed international investors of the agricultural fund, which will be managed by New Hope, included Temasek, New York-listed Archer-Daniels-Midland Co and Japan's Mitsui & Co Ltd, Liu told reporters on the sidelines of the China Overseas Investment Summit on Wednesday.

"The investment will focus on agricultural products and related businesses overseas and in China," he said.

Liu would not disclose the size of the fund but said details would be announced during the launch ceremony on November 21 in Beijing.

New Hope, the country's largest privately owned agricultural conglomerate, is the parent of Shenzhen-listed Sichuan New Hope Agribusiness Co Ltd.

Liu said the group already has a domestic agricultural fund, which had a first phase investment of 1 billion yuan ($157.6 million), and the fund had been doing well in the past year.

"China has 800 million farmers, of which 300-400 million are moving to cities," he said. "That will increase the demand for agricultural products while decrease the supply. This is positive to agricultural companies, like us."

The price of pork, a staple food product, has become a key driver of inflation in China and rising demand for the meat has also fueled import from overseas, including from the United States.


New Hope has recently set up an overseas investment center in Singapore to organize its investments in Southeast Asia, where New Hope has more than 10 animal feed plants and poultry farms.

"We plan to open 7-8 new plants each year in overseas, instead of 3-4 a year in the past few years," Liu said.

New Hope plans to set up plants and farms in Middle East, South Africa and central Europe.

The group will sell about 15 million tonnes of feedstock this year and consume about 10 million tonnes of corn in 2011, Liu estimated.

Shares of Sichuan Hew Hope fell 3.2 percent on Wednesday and have eased 4 percent this year, beating a 12 percent decline on the benchmark Shanghai Composite Index .SSEC. ($1 = 6.347 Chinese Yuan)

(Reporting by Alison Leung; Editing by Chris Lewis and Ken Wills)
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