Genus signs second JV in China

Published on: Feb 25, 2013

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., the 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 very large potential market for Genus with approximately 50% of the world's pigs produced and consumed in country. 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, scheduled for completion within the next 12 months.

Genus will provide pureline porcine stock from the Genus porcine genetic division's (PIC) global high-health pyramid to stock the farm. The JV farm will be managed by Genus.

The structure enables world class farm practices to be implemented and Genus' intellectual property to be protected. In addition, the JV structure will enable the introduction of a royalty revenue model which 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 is continuing to pursue other JV opportunities in China to develop further its porcine business.

Genus advances animal breeding through biotechnology and sells added-value products for livestock farming and food producers. Its worldwide sales are made in 70 countries under the trademarks "ABS" (dairy and beef cattle) and "PIC" (swine) and comprise semen and breeding animals.

With headquarters in Basingstoke, U.K., Genus companies operate in 30 countries on six continents, with research laboratories located in Madison, Wis.

Operating for more than 50 years, PIC is a global leader in providing pig breeding stock and technical support for maximizing genetic potential to commercial pork producers.

Shennong Agricultural Group is a leading vertically integrated pig producer in China's Yunnan province, employing more than 2,000 people. Since beginning operations as a commercial feed producer in 1999, the privately held firm has established pig production farms and value-added slaughtering, meat processing and retailing businesses. n