Partnership promotes safe fish feed production in China
GUANGDONG, China–(BUSINESS WIRE)–
Leading global investment firm KKR has completed an investment in Yuehai
Feed Group Co. Ltd. (“Yuehai” or the “Company”), a leading aquatic feed
company in China focused on providing feed and nutrition solutions for
shrimp and seawater fish farming. Yuehai and KKR are partnering to
expand the Company’s operations and provide safe and high-quality
aquatic feed to the country’s large base of fishery farmers and
suppliers to better meet the demand of Chinese consumers for safe and
healthy animal protein options.
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Yuehai is the largest manufacturer of high-end special aquatic feed
products in China by market share according to China Feed Industry
Yearbook, with a primary focus on shrimp feed and seawater fish feed.
Yuehai aims to capture growth opportunities in the large and evolving
freshwater fish feed sector as the industry experiences technology
upgrades. This includes a transition from raw frozen fish and
traditional pellet feed to more advanced floating puffed feed due to its
higher conversion efficiency and environmentally friendly qualities.
Puffed feed outgrew the overall industrial feed sector at a compound
annual growth rate (“CAGR”) of 18% from 2008 to 2014, according to the
According to Food and Agriculture Organization of the United Nations,
China has experienced rising aquatic consumption with a faster growth
than other forms of animal protein, driven by rising incomes and
improved health awareness. However, China’s per capita annual aquatic
consumption of 35 kilograms is still lower than its Asian neighbors
Japan and South Korea, both at over 50 kilograms.
This demand comes as China implements stricter aquatic capture,
production and feed policies to ensure high food safety, quality and
environmental standards across the industry. China’s new Food Safety Law
and Environmental Law, both effective in 2015, include enforcing the
reduction of raw frozen fish as aquatic feed, enhancing the management
and oversight of antibiotics in feed, and enforcing the use of more
environmentally friendly equipment and production practices. The
policies are poised to benefit larger, industrialized feed producers
such as Yuehai that have full oversight of the feed production process.
Zheng Shixuan, Chairman & CEO of Yuehai, said, “High quality feed is
critical to ensuring nutritious value of shrimp and fish and
safeguarding them from disease. Given the strong and rising demand for
fishery consumption in China, it is a pivotal time for us to expand and
provide healthy aquatic feed to the market. We believe KKR will become a
truly value-added partner to Yuehai, and their deep expertise in food
safety space in China will help us achieve these goals.”
David Liu, Member of KKR, Co-Head of KKR Asia Private Equity & CEO of
KKR China added, “KKR has maintained a strong commitment to helping
address the growing demand for a safer and more secure food supply in
China. Our partnership with Yuehai is in line with this objective, and
we look forward to providing healthy feed products to China’s aquatic
farmers alongside this experienced and capable management team.”
“Yuehai is the leader in the high-end special aquatic feed industry, and
is well positioned to grow and capture new opportunities. We have been
impressed by Yuehai’s leading technology, innovative practices and
extensive expertise in the feed space. With KKR’s deep knowledge and
experience in China’s agriculture and food sector, I am confident in our
collective ability to provide high-quality products to an increasingly
discerning customer base,” said Julian Wolhardt, Member of KKR.
This is KKR’s fifth partnership in working with leading Chinese
companies in advancing food safety and security in China. Other industry
leaders in which KKR is now partnering include Modern Dairy, Asia Dairy,
COFCO Meat and Sunner Development.
KKR’s investment is through its China Growth Fund. Further details of
the transaction are not disclosed.
Based in Zhanjiang, Guangdong, Yuehai Feed Group Co. Ltd. has been
dedicated to aquatic feed production for more than 20 years, and
currently the largest player in special aquatic feed segment in China.
The Company mainly focuses on high-end shrimp feed and saltwater fish
feed, and has also developed a meaningful presence in the freshwater
fish feed segment. Its total annual production capacity has reached over
1 million tons.
Yuehai is well-known for its high-tech and premium quality products in
the industry, and has won awards including “China AAA+ Quality
Enterprise”, “Guangdong High-tech Products”. The Company has formed
close and long-term relationship with customers through an extensive
sales network and comprehensive technology services. Yuehai is dedicated
to promote food safety and environmentally friendly farming in China’s
KKR is a leading global investment firm that manages investments across
multiple asset classes including private equity, energy, infrastructure,
real estate, credit and hedge funds. KKR aims to generate attractive
investment returns by following a patient and disciplined investment
approach, employing world-class people, and driving growth and value
creation at the asset level. KKR invests its own capital alongside its
partners’ capital and brings opportunities to others through its capital
markets business. KKR seeks to combine its global resources and network
with local expertise to assist its investment companies by bringing
value-add beyond capital. KKR’s China efforts and team highlight this
approach, as they have invested through different economic cycles and in
a number of market leading companies in China. References to KKR’s
investments may include the activities of its sponsored funds. For
additional information about KKR & Co. L.P. (NYSE:KKR), please visit
KKR’s website at www.kkr.com.
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Source: KKR & Co. L.P.