GENUS PLC, a leading global animal genetics company, announced Feb. 25 that it has signed a second porcine joint venture (JV) agreement in China for a 1,000-sow nucleus farm with Yunnan Shennong Agricultural Group Co. Ltd., a leading integrated pork producer in the Yunnan province.
The JV further expands Genus' porcine business in China and is in line with its corporate strategy to focus on growing in key markets and segments such as the Chinese integrated pork producer segment, the announcement said. China is a market with very large potential for Genus: Approximately 50% of the world's pigs are produced and consumed in China.
Following a JV agreement with BeSun in July 2012, Genus is currently implementing a growth strategy through JV partnerships with leading integrators and expanding its production base in China.
Genus said it will be a 65% partner in the Shennong JV through a cash investment of approximately £2.7 million. The venture will operate a state-of-the-art nucleus farm, which is scheduled for completion within the next 12 months.
Genus will provide the farm with pure-line porcine stock from the Genus porcine genetic division's (PIC) global high-health pyramid. The JV farm will be managed by Genus.
The structure enables world-class farm practices to be implemented while protecting Genus' intellectual property. In addition, the JV structure will enable the introduction of a royalty revenue model that is already in operation across Genus' porcine businesses in other key geographies.
The JV will produce crossbred grandparent females. Shennong will use at least 40% of the output to support the expansion of its pig production program. The remaining animals will provide important additional volume to support the growing sales of PIC breeding animals in China.
Once in full operation, which is expected to be in 2014, the herd will underpin production of 2.5 million slaughter pigs per year, the company said.
Genus said it continues to pursue other JV opportunities in China to further develop its porcine business.
Genus advances animal breeding through biotechnology and sells added-value products for livestock and food producers. It sells semen and breeding animals as ABS for dairy and beef cattle and as PIC for swine.
Since beginning operations as a commercial feed producer in 1999, Shennong has established pig production farms and value-added slaughtering, meat processing and retailing businesses.