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China's feed industry in transition: the case of New Hope Group – an industry perspective

China's feed industry in transition: the case of New Hope Group – an industry perspective Purpose – The purpose of this paper is to review the development of the processed feed industry in China through the lens of one of its most successful and earliest entrants, the Hope Group's “New Hope” enterprise. With the feed industry in China now facing a transition phase, the paper looks at the root causes of the problems facing China's feed industry, analyzes the transition strategy undertaken by New Hope and others, and discusses the opportunities for industry growth in the world's most populous country, where urbanization and standards of living are still on the rise and per capita use of feeds is still low by world standards (e.g. one‐fifth of that in the USA). The case also addresses the potential industry impact of mandates outlined in China's Twelfth Five‐Year Plan, such as the imperative to modernize agriculture and improve peasants’ economic well‐being. Design/methodology/approach – The paper draws on expert knowledge of the CEO of New Hope Group's sister agribusiness company, West Hope Group, as well as New Hope Group annual reports and global economic data. Findings – The study reveals future challenges to China's processed feed industry as being price of labor, raw materials, and energy rises; companies undergoing integration; and established companies shifting from product marketing to service marketing models. Practical implications – This paper is useful for academics interested in industry perspectives, policymakers, practitioners, and business people considering investment in China. Social implications – How China's processed feed and breeding industries modernize will impact the economic well‐being of each link in the nation's agribusiness chain (from small producers to conglomerates), the cost and quality of animal‐based proteins, and the world's “food vs. fuel” conflicts. Originality/value – The paper offers a rare insider's look at one of China's largest private companies and a global player in agribusiness. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Agribusiness in Developing and Emerging Economies Emerald Publishing

China's feed industry in transition: the case of New Hope Group – an industry perspective

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Publisher
Emerald Publishing
Copyright
Copyright © 2011 Emerald Group Publishing Limited. All rights reserved.
ISSN
2044-0839
DOI
10.1108/20440831111167164
Publisher site
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Abstract

Purpose – The purpose of this paper is to review the development of the processed feed industry in China through the lens of one of its most successful and earliest entrants, the Hope Group's “New Hope” enterprise. With the feed industry in China now facing a transition phase, the paper looks at the root causes of the problems facing China's feed industry, analyzes the transition strategy undertaken by New Hope and others, and discusses the opportunities for industry growth in the world's most populous country, where urbanization and standards of living are still on the rise and per capita use of feeds is still low by world standards (e.g. one‐fifth of that in the USA). The case also addresses the potential industry impact of mandates outlined in China's Twelfth Five‐Year Plan, such as the imperative to modernize agriculture and improve peasants’ economic well‐being. Design/methodology/approach – The paper draws on expert knowledge of the CEO of New Hope Group's sister agribusiness company, West Hope Group, as well as New Hope Group annual reports and global economic data. Findings – The study reveals future challenges to China's processed feed industry as being price of labor, raw materials, and energy rises; companies undergoing integration; and established companies shifting from product marketing to service marketing models. Practical implications – This paper is useful for academics interested in industry perspectives, policymakers, practitioners, and business people considering investment in China. Social implications – How China's processed feed and breeding industries modernize will impact the economic well‐being of each link in the nation's agribusiness chain (from small producers to conglomerates), the cost and quality of animal‐based proteins, and the world's “food vs. fuel” conflicts. Originality/value – The paper offers a rare insider's look at one of China's largest private companies and a global player in agribusiness.

Journal

Journal of Agribusiness in Developing and Emerging Economies – Emerald Publishing

Published: Oct 28, 2011

Keywords: China; Agriculture; Agribusiness; Animal feed; New Hope; Challenges in transition period; Scale extension; Industrialization; Professionalization; Merger and reorganization

References

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