(Yicai Global) Dec. 10 -- Tech-Bank Food, one of China's industrial-scale pig breeders, said it plans to set up a pig-breeding base in northern Shanxi province at a cost of CNY2 billion (USD285.8 million) to expand the firm's sow farming operations and underpin long-term growth.
Tech-Bank Food has penned a deal with the local government of Shanxi's Xiyang county, the food producer said in a statement yesterday. Poverty-relief loans will account for about CNY500 million to CNY1 billion of the investment in the farm, which will have 100,000 sows in stock and an annual production capacity of 2.5 million weaned piglets.
Government assistance with funding the project will also effectively reduce capital costs and any financial strain on the Ningbo-based company, it said, adding that the deal will have no impact on the company's performance this current year. The local government will also offer policy and other support along with a favorable business environment for Tech-Bank Food, the company said.
China has had to cull vast numbers of hogs as a result of outbreaks of African swine fever that started last year. A series of policies have been implemented to support the sector and bring the situation back to normal. The government aims to restore the nation's pig herd to about 80 percent of the usual level by the end of next year.
Shares of Tech-Bank Food [SHE:002124] fell 3.5 percent today to close at CNY11.7 (USD1.70) each. The company's stock price has climbed 72 percent so far this year.
Founded in 1996, Tech-Bank Food has six businesses: aquatic feed, biological products, living hog breeding, fresh food, engineering construction and supply chain.