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China Canceled the Control of Oil Processing Enterprises of Foreign Investments, Industry Competitions Intensified

China Agriculture Report By CnAgri2017-03-15 10:04:52China Agriculture Report Print

Soybean crushing capacity has been increasing rapidly since 2000 in China. With the advantages in soybean trade and capital, the foreign-owned enterprises take the largest share of China’s soybean crushing industry and there is also the negative impact of over capacity. NDRC announced the strict control of the soybean oil capacity expansion and China started to control the oil processing enterprises of foreign investments in 2008.

In January 2017, China canceled the control of the oil processing enterprises of foreign investments, according to the State Council’s notice. After the policy was issued, some enterprises began to make plans: in the middle of February, Shandong Bohi, Louis Dreyfus and Qingdao Port Group signed the framework cooperation agreement in Qingdao. The three sides planned to jointly invest on a large grain and oil processing base in Dongjiakou Port and the design oil processing capacity was 4 million ton/year. The first phase of the 2 million tons project is expected to be completed and put into operation in May 2018.

In early March, New Hope Group planned to cooperate with Cargill to set up a 5,000 ton/day soybean processing project in Hebei. In 2015, the 1.3 million ton/year soybean processing project of Hebei Jiahao Grain & Oil Company (invested by Cargill) was put into production. This time the cooperation may be an expansion project of the company.

In addition, Hopefull Grain & Oil Group had completed the preliminary site selection for the processing and logistics base in Bohai New District of Cangzhou, Hebei and the group planned to set up the third grain processing logistics base in the same area in future. Under the condition of severe overcapacity in soybean crushing, the expansions of the enterprises also entered the stage of structural optimization: internally they pursue product upgrading and develop high-protein feed meal and high value-added by-products; externally they cooperate with other companies, strengthen the competitiveness in industrial chain, product advantage, logistics and trade, etc.

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