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Why is ADM Setting up an Aqua Feed Company in Central China

China Agriculture Report By CnAgri2017-03-23 13:30:44China Agriculture Report Print

Recently, ADM has announced that it would set up an aqua feed processing company with annual capacity of 0.12 million MT in Xiangtan of Hunan. The main reasons for the building of an aqua feed company in central China are as the followings:

(1) ADM has advantage in the field of feed formula. Since 1933, ADM has entered feed sector, and as early as 1990’s, it has built a premix feed factory in Dalian to develop aqua feed production, which is good for giving full play to ADM’s leading advantage in the field of feed formula.

(2) Owing to overcapacity, other agricultural product processing sectors have no profit. Restricted by international grain companies’ investment in processing other agricultural products in Chinese market, and overcapacity of grain and oil seed in China, processing margins saw a continuously low level. This investment is the fifth feed processing factory of ADM in China, after Tianjin, Nanjing, etc.

(3) The competitiveness of aqua feed market in central China was less fierce than south China. Compared to more fierce market competitiveness and increasingly clear market patterns in south China, aquaculture in central China has an increasing demand for special feed and high-end puffed freshwater feed, and feed companies also start their rapid acquisitions, which bring an important period of ADM’s enter the Chinese market.

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