Feed industry is a highly-marketized industry with huge market and provides development opportunities for numerous SMEs. Meanwhile, with high marketization and transparency, it prompts many leading enterprises. In 2011, national production volume of industrial feed was 181 million tons, up by 11.70% YOY and its overall scale ranking the first in the globe. In 2015, national production volume of feed exceeded 200 million tons, up by 23.50% from 2010. In feed industry plan in the thirteenth Five-Year Plan, it explicates that the target production volume of feed industry is 220 million tons in which swine feed is to reach 94 million tons.
Ministry of Agriculture published hog plan of the thirteenth Five-Year Plan and put forward the target that proportion of large-scale farms with sales volume of over 500 increases from 42% in 2014 to 52%. Small-scale breeders will gradually exit from the market and large-scale development of hog raising will accelerate.
With large-scale development, standardization and intensification of hog raising industry, demands for premix feed and compound feed of large-scale feed enterprises show a growing trend. In the future, proportion of concentrated swine feed will continue declining. It is estimated that every 1% up in large-scale development brings 0.41% up in proportion of compound feed and 0.50% up of in proportion of premix feed. At the same time, large-scale development prompts a big growth potential in feed production growth.
There are numerous feed enterprises in China and the industry is in full competition. It is an irresistible integrated trend that small feed factories will merge and integrate with large ones. Up to Dec, 2014, there were only 7,061 enterprises authorized by feed production certificates. At the end of 2015, manufacturers of mixed feed (concentrated feed, concentrated feed supplement) were 6,772, 4071 fewer than that in 2010. In 2016, China’s feed enterprises continued decreasing to around 3,000.
According to CRI, the aggregate market concentration rate of top 5 enterprises in the growing feed industry was about 10% in 2015.
As the output volume of pork fails to meet the domestic demand in China, the import volume continues to rise.