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Giantstar to build new facilities, raise cash
Posted on Thursday, 05 November 2020 12:14
Leshan Giantstar Farming & Husbandry is preparing to raise CNY 2.80 billion (USD 418.86 million) to accelerate the growth of its pig breeding business.
The company entered the livestock and poultry industry in July 2020 following a major asset restructuring comprising the acquisition of Superstar Farming for CNY 1.82 billion.
It is now aiming to expand in the southwest of province of Sichuan and eventually to spread across China to reach a slaughtering capacity of 1.20 pigs annually in 2021 following the construction of new farms.
As of 30th September 2020, it had sow breeding scale of 47,900, which is expected to reach 67,900 by the end of 2020.
Giantstar notes China had an annual slaughter capacity of 693.82 million a head in 2018 and an output of 54.03 million tonnes.
However, supply has been tight since 2019 due to the African swine fever epidemic and other factors and in those 12 months 544.19 million were slaughtered, representing a 21.6 per cent decrease year-on-year.
Between 2016 and 2018, Sichuan had 66.00 million to 69.00 million pigs, but this figure dropped in 2019 to 48.52 million, though the province intends to restore numbers to 60.00 million by the end of 2020.
Zephyr, the M&A database published by Bureau van Dijk, shows 313 deals targeting the animal production and aquaculture sector have been announced globally in 2020 to date.
Of these, 115 are within the hog and pig farming category, with Muyuan Foodstuff accounting for the largest as it is raising CNY 10.00 billion from an issue of convertible bonds.
The Nanjing-based pig farmer is using proceeds to support long-term and sustainable business development, including the construction of 23 new breeding and four slaughtering facilities.
© Zephus Ltd