Heilongjiang dairy industry investment boom: why "bosses" go up north wave upon wave?

   In recent months, a dairy investment boom quietly bursts from Inner Mongolia to Heilongjiang: this July Ma Yun took stake in a livestock company owned by Erie with two billion yuan, creating the largest investment by "outsider"  to the dairy industry; August, Xu Jiayin, chairman of Hengda Group, led a delegation to visit Heilongjiang, launching speculation about Hengda's purpose to generously enter the dairy industry; and in September, Minister of Agriculture of Australia, Barnaby Joyce led a study tour to visit Heilongjiang, in order to strengthen the cooperation of two countries.
    Successfully hosted more than 10 years with the reputation as Chinese dairy festival, World Dairy Expo/China has also previously announced that the exhibition of 2015 would be held in Harbin, Heilongjiang. For a time, "Heilongjiang dairy investment" is rapidly heating. China's dairy farming spreads over 14 provinces, so why Heilongjiang has become the favorite choice for the investment, attracting a group of investment predators to send study tours there wave upon wave? What opportunity will we see next? A heated discussion will be expected in the field of dairy and finance in the following 6 months.
 
Cross-border capital pointing to the dairy industry, by what the dairy industry of Heilongjiang excites the "bosses"?
    After Ding Lei of NetEase invested in raising pig, Liu Chuanzhi of Lenovo set foot in fruit and tea, and Liu Qiangdong of Jingdong sold rice, the trend of cross-border capital seeking to improve the enterprise development structure, along with Ma Yun, Xu Jiayin leading seperately Alibaba and Hengda Group, moves to the dairy industry. By what the dairy industry of Heilongjiang excites those "bosses"? Despite the geographical advantages such as, that Heilongjiang is situated in the "golden belt" of sweet corn and cow, and that the government of province and state attaches great importance to Heilongjiang's dairy industry with policy support in all aspects, the huge investment potential is well expected in the future. The following official statistics shows its attractive financial perspective.
    According to the Heilongjiang government: in 2013, Heilongjiang province's raw milk production value was 20 billion Yuan, dairy farmers'  net income reached 4 billion yuan, with an everage of 215 yuan's growth; dairy farming transformed to food 40 billion kg, realizing value-added benefits of 1 billion yuan; transfering 400 thousand rural surplus labor force without leaving home, dairy farming has become the leading industry to promote agricultural economic development in Heilongjiang. The "2013 general situation survey of dairy industry in Heilongjiang province and in China ", also fully demonstrate the leading position of Heilongjiang in dairy industry of China.
 
2013 General Situation survey of dairy industry in Heilongjiang province and in China
 

 

China

Heilongjiang

Percentage/ %

Number of enterprise

658.0

62.0

9.42

Dairy production (10 thousand tons)

2698.0

213.7

7.92

Liquid dairy production

(10 thousand tons)

2335.97

150.3

6.42

Solid dairy production

(10 thousand tons)

362.06

63.4

17.51

Milk powder production

(10 thousand tons)

159.21

60.5

38

Infant formula milk powder

(10 thousand tons)

70

28

40

 
    At the same time, according to the "Heilongjiang large-scale dairy processing enterprises ranking" announced by Heilongjiang governmen, there exist 62 dairy enterprises above scale in Heilongjiang, 10% of the country with total number of  658, the annual processing capacity of fresh milk is up to 10.04 million t. 7 dairy enterprises of the national Top 10 build factories in our province. "
 
In addition, in the "Heilongjiang province animal husbandry investment potential development report" provided by Heilongjiang Investment Service Center, according to the Chinese Academy of engineering, by 2020 China's population will reach 1.45 billion, the growth is rigid and irreversible in demand of livestock products by Chinese residents. It is expected that by 2020,China's infant formula market demand will be about 800 thousand tons, middle-aged and old people formula milk powder 200 thousand tons, high-end liquid milk 5 million tons, there will be a lack of 400 thousand tons of infant milk powder, 120 thousand tons of middle-aged and old people milk formula powder, and the gap is even larger in the high-end liquid milk market. Besides, Heilongjiang is located in Northeast Asia, neighboring Japan and Russia, with the domestic and foreign consumer's demand and the export potential of dairy products, we can foresee that the huge growth for Heilongjiang dairy industry in the near future.
    As is known to all, to satisfy the market supply and demand and to grow stably the dairy production capacity, the "milk source" is the key. Heilongjiang has a good advantage in milk source, which impresses the investors. The report shows: in 2012 Heilongjiang dairy cow population reached 2690 thousand, milk production was 8570 thousand tons, the number of high-quality Holstein herds, the standardized scale dairy farm (plot) and milk cow aquaculture output ranked first in China, One cup out of six of milk came from Heilongjiang.
 
Why the World Dairy Expo/China also focus on Heilongjiang?
    With a giant investment potential, Heilongjiang dairy industry attracts not only foreign investors, but also the most important event in China dairy industry, World Dairy Expo/China. The the Great Wall Exhibition Co. Ltd. recently announced that the next exhibition would be on April the 22th to 24th, in Harbin, Heilongjiang .
    World Dairy Expo/China has been successfully held twelve sessions, each year held in turn in different city in China, aims to create the best exchange and trade platform for dairy industry at home and abroad, sharing a very high international vision and influence. Why such international dairy industry exhibition also focus on Heilongjiang, besides "great minds think alike"?
    To answer this question, Ms. Yu Wenhui , project manager of World Dairy Expo told us: "according to statistics of the 12th exhibition held in June this year, guests from Shaanxi where it held accounted for 35.7%, and Heilongjiang for 8.27%, which ranked second in the field according to a survey of professional audience; this survey also shows that there will be a huge upward tendency to extend for Heilongjiang's dairy farming, dairy processing scale and the procurement plans for next year; what's more, the World Dairy Expo/China located in Harbin has also received a strong affirmation and support from the local government. With the well known geographical advantage, and constantly growing market potential, the 2015 Expo in Harbin is the best choice ever, without hesitation"
    So, if the China International Dairy Industry Exhibition will be held in Harbin, to what degree it will bring opportunities to the development of the Heilongjiang dairy industry?
    On the one hand, by years of experience in organizing exhibitions, China International Dairy Industry Exhibition has accumulated rich professional resources at home and abroad, especially the international ones. According to the exhibition organizers, the 2014 exhibition report published by the Great Wall Expo , the 12th China International Dairy Industry Exhibition with its nearly 40000 square meters scale, welcomed dairy industry elites from China (including Hongkong and Taiwan), France, Holland, the United States, Germany , New Zealand, more than 20 countries and regions, appealing to a total of 327 domestic and foreign enterprises, and 25457 audience. The arrival of these western developed countries, and well-known dairy enterprises in Harbin, will introduce to Heilongjiang more high-tech equipment,  modern ranch construction projects, advanced concepts of management, in order to further develop the dairy trades between Chinese and the other countries. At the same time it is also expected to bring more capital financing for the local dairy industry, the dairy industry is conducive to improve the supporting facilities, to accelerate Heilongjiang dairy industry chain development of modernization.
    On the other hand, the organizers of the 2015 China International Dairy Industry Exhibition will also invite China  Institute of Inspection and Quarantine as a support department, guaranteeing more safety and high quality in the importation of overseas dairy products, excellent cows, frozen semen, forage grass and feed etc.. At the same time we will also hold China International Dairy conference, and open international and professional investment forum, thematic forums and technical lectures, providing the best platform for international exchanges. Then, the 2015 China International Dairy Industry Exhibition will drive Heilongjiang's dairy, becoming the focus of China's and global dairy industry.