Several major Chinese pig farming companies, including Wen’s Shares, Tang Ren Shen, and Jin Xin Nong, have halted key investment projects due to prolonged low pork prices, regulatory challenges, and market oversupply. These changes reflect a shift towards asset-light business models, such as leasing and farmer partnerships, to mitigate risks. The terminations also stemmed from financial strain, poor projected returns, and infrastructural hurdles. This strategic recalibration highlights the pressures faced by China’s pork industry and the move towards operational efficiency and sustainability in an unpredictable market.
In late 2024, China’s pig farming industry saw a strategic shift among major players. Due to cautious outlooks on future market trends or constraints imposed by external conditions, several publicly listed pig farming companies have announced the termination of certain previously planned fundraising investment projects since the beginning of the fourth quarter this year. These decisions highlight the industry’s growing focus on risk management and strategic realignment.
Wen’s Shares Halts Key Projects in Hubei Province
On November 22, Wen‘s Foodstuff Group announced the termination of two pig farming projects in Hubei Province. One project in Xianning faced land use and wastewater management challenges, posing environmental risks, while the second in Songzi was affected by high-speed railway construction plans.
The original plan earmarked CNY 50 million (USD 6.9 million) for the Xianning project to develop a farming zone with an annual capacity of 50,400 hogs, targeting completion and production by December 2024. Likewise, the Songzi project planned to invest CNY 60 million (USD 8.2 million) to establish a facility for 60,000 hogs annually, also set for completion by year-end.
Following the termination of these projects, Wen’s plans to retain the remaining CNY 79.94 million (USD 11 million) of raised funds in the designated fundraising account. The company stated that it will work to identify new investment opportunities scientifically and prudently as soon as possible.
These two farming zones are part of a near CNY 9.3 billion (about USD 1.3 billion) investment project funded through convertible bonds issued by Wen’s in 2021. The company has terminated 14 of its originally planned investment projects, leaving over CNY 3.3 billion (about USD 453.9 million) in unused funds.
Wen’s has redirected approximately 2.2 billion yuan CNY 2.2 billion (about USD 303 million) from unspent and terminated project funds toward revised usage plans or newly added investment projects.
Tang Ren Shen Shifts Towards Asset-Light Operations
Similarly, Tang Ren Shen has opted to step back from large-scale investments, including a hog farming poverty alleviation project in Rongshui County. Despite an initial outlay of CNY 9 million (about USD 1.2 million), the company redirected the remaining CNY 115 million (about USD 15.8 million) to bolster liquidity.
As early as August this year, Tang Ren Shen also announced the termination of two other pig farming projects from the same fundraising initiatives, reallocating approximately CNY 439 million (about USD 60.3 million) to supplement working capital permanently.
Instead, the company is pivoting towards leasing models and partnerships with farmers, aiming to reduce financial exposure in a saturated market.
Jin Xin Nong Adjusts Financial Priorities
Jin Xin Nong has followed suit, canceling two pig farming projects in Guangdong Province. Designed to modernize breeding and finishing facilities, these projects were halted due to extended periods of low pork prices and mounting industry-wide financial strain. The company has redirected over CNY 380 million (about USD 52.2 million) to stabilize its liquidity.
A Strategic Shift Towards Efficiency
The move away from aggressive expansion reflects a broader recalibration within China’s pig farming industry. Falling pork prices, coupled with regulatory pressures and environmental compliance demands, are steering companies towards more flexible, asset-light models such as leasing and cooperative farming. These strategies aim to sustain profitability while minimizing risks.
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