By Hallie Gu and Dominique Patton
BINH PHUOC, Vietnam/BEIJING (Reuters) - China's top feed producer, New Hope Liuhe (SZ:000876), said on Sunday it had completed construction of its first overseas pig farm in Vietnam, seeing potential demand growth in a major market devastated by a severe African swine fever outbreak.
The pig farm in Binh Phuoc province, which has an annual production of 300,000 pigs, is one of three that New Hope Liuhe, the agribusiness subsidiary of New Hope Group, invested in recently in the Southeast Asian nation.
The farm is expected to start getting pigs in November and eventually have an inventory of 13,500 Hypor-breed sows produced by Holland's Hendrix Genetics. It will come online at a time when Vietnam has seen significantly reduced pork supplies.
The deadly African swine fever has spread to farms in 61 of Vietnam's 63 provinces since it was first detected in February. Vietnam has culled 13% of its pig herd, or 4 million pigs, according to the Ministry of Agriculture and Rural Development.
"For pig farming, every disease is both a challenge and an opportunity. Similar to what is happening in China, African swine fever disease will accelerate the consolidation of the pig farming sector," said Liu Zhong, general manager of New Hope Liuhe'a overseas pig sector.
New Hope has equipped its pig farm in Binh Phuoc with multi-layered sanitisation and disinfection systems and animal waste treatment facilities worth 20 million yuan (2.3 million pounds), all part of its upgraded biosecurity efforts.
The company also plans to build a feed mill on the Binh Phuoc farm to supply animal meals to the herd and reduce the risk of exposing feed to viruses in the open air and during transport.
Liu said New Hope Liuhe has solid experience in preventing African swine fever in China that can be easily applied as it expands into pig production overseas.
"You wouldn't do a tough job if you don't have the skills or tools," Liu said.
The new farms expand New Hope's footprint in Southeast Asia on top of its existing eight feed firms in Vietnam, which sold more than 700,000 tonnes of feed in 2018.
New Hope says the Binh Phuoc pig farm will help it increase sales by 90,000 tonnes of pig feed every year in Vietnam, where the feed giant built its first overseas plant 20 years ago.
The new investment also comes as New Hope increases hog production in its domestic market, with the goal to be among the top three producers in the world’s top pig herd by 2022.