Genus forms JV to expand its market share in China

published 31 July 2012

Genus, a global animal genetics company, has said that its porcine genetics division, PIC, has signed a joint venture (JV) agreement with Shaanxi Yangling BeSun Agricultural Group, an integrated pork producer in China, to partner in the operation of a large 4,250 sow nucleus farm in China's Shaanxi province.

The JV, which will see Genus become a 49% partner through a cash investment of about £8.7m, has been formed to expand Genus's porcine business in China, in line with its new corporate strategy to focus on growing key markets and segments such as the Chinese integrated pork producer segment.

Genus plans to increase its share of the large Chinese pork market, where around half of the world pork consumption occurs, from its small existing market share of around 1.0%.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

The JV farm will be managed by Genus, ensuring that its intellectual property will be protected.

The JV will produce grandparent sows with the output from the farm being used proportionally by the JV partners, approximately 50% each, Genus's share of the output providing important additional volume to support its growing sales of breeding animals in China. Once in full operation, the herd will underpin production of 10m slaughter pigs per year.

The share price rose 0.47% to 1,285p by 09:01.