Jilin Zhengye Agriculture Development Co.

completed

ADC was established in 1998, when Mr. Han took-over a slaughterhouse in GongZhuLing from a failing state owned enterprise (SOE). With equity funding from ZG, ADC subsequently acquired a pig farm and an 82% stake in a feed mill. IFC will be funding the next phase of the venture that will complete the integration of ADC’s pig breeding operations. The project, to be implemented over five years, will introduce improved slaughter pigs in the Jilin market, and fresh and processed pork products in the Jilin province. US-based PIC (recently renamed Sygen International plc.) is ADC’s technical partner responsible for providing the genetic stock and technical support to breed improved pigs. The PIC pigs yield up to 25% more meat than local breeds and have higher feed-to-meat conversion ratios. The proposed venture involves the establishment of eleven pig breeding farms, a processing plant and the acquisition an existing slaughterhouse. In addition to the assets already acquired. Development ImpactUpon completion, the project will favorably impact more than 10,000 farmers in Jilin province. They will earn higher incomes derived from productivity gains associated with breeding the improved pigs supplied by ADC. Feed cost savings to the pig breeding industry is estimated at $15 million per annum. These savings will eventually be captured by the end-consumer. Farmers will also benefit from technical support from PIC and ADC as well as from insights to modern pig breeding techniques. The project will be a major source of employment via the creation of 1,200 jobs. The workers will earn approximately 33% above their present wages. In addition, ADC will be undertaking many activities previously done by less efficient and financially impaired SOEs, and in so ding it will promote more efficient allocation of resources. The investment objectives are in-line with the provincial government’s efforts to develop the pig-breeding and corn industries, two priority sectors for Jilin province, considered the “grain bowl” of China. Given its substantial benefits to the local community, the project has strong support from the provincial authorities.IFC’s RoleIFC will: provide long-term financing presently not available to support this five year project;strengthen a private enterprise’s efforts to be the largest fully integrated pig-operation in Jilin province; support an integrated project that will be the role model for other industry players; assist ADC in implementing a MIS system, utilizing IFC’s Trust Funds, and establish a fair pricing mechanism for PIC pigs sold to ADC.