Muyuan Loan

completed

Muyuan Foodstuff Co, Ltd is a large-scale, integrated, farrow-to-finish intensive pig breeder and hog producer located in Neixiang County, Henan Province, China. Since the establishment of the first hog farm in 1992, the business has seen progressive expansion. IFC previously made an equity investment in Muyuan in 2010. Currently Muyuan operates 17 farms, including two boar station, breeder farms (great grandparent, grandparent and parent farms) and hog farms. The farms occupy a total area of 427.55 ha, with individual farm sizes ranging from 0.43 ha to 109.5 ha. In addition, Muyuan operates one feed mill in Guanzhang Town with an annual production capacity of 400,000 tons. Eight facilities are currently under construction; two feed mills and six farms (including those at Wolong and Dengzhou). Muyuan previously partnered with Shandong Longda Group Limited (Longda) to establish a slaughter house with a processing capacity of 1 million hogs per year (i.e., 3,000 hogs/day). The slaughter house is a dedicated facility designed to process mainly Muyuan pigs with Muyuan owning a 40% stake. Individual farms are located away from local communities in rural areas in the agricultural Neixiang County. The majority of the land area of each farm is occupied by housing for the pigs. Pigs are provided with on-demand feed and water, the former deriving from silos located outside each unit. Pigs are provided with slatted floors allowing for the collection and storage of solid waste and urine below the unit with subsequent flushing or gravity flow to biogas digestors. Summer cooling is provided through ceiling or wall fans and opening of shutters: buildings are designed to maximize air flow through the unit. Winter heating is provided by water heated by small coal-fired boilers and pumped through a ground level piping system. Farms also have offices, accommodation and a canteen.IFC’s proposed loan investment of $20M can be considered a corporate loan but it is understood that the proceeds will primarily support the development of the Wolong commercial hog farm facility to allow for annual production of 300,000 hogs. Upon completion, this Project would expand Muyuan’s annual hog production capacity to 1.35 million.