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Chinese enterprises in Ukraine to spend 100 million yuan desperately to cultivate land, in fact, to help domestic food security?

author:China Business Strategy
Chinese enterprises in Ukraine to spend 100 million yuan desperately to cultivate land, in fact, to help domestic food security?

  Text | Hua Shang Tao Li Wu Su

  Food security cannot be overemphasized, you know, Chinese account for about one-fifth of the world's population, but China's arable land area accounts for less than one-tenth of the world's arable land, so some grain needs to be imported.

  Citing official data, China's grain imports increased from 41.31 million tons in 2008 to 1.65 trillion tons in 2021, and the grain self-sufficiency rate fell from 93.4% to 80.9% in the same period, which means that nearly one-fifth of the grain Chinese eat in 2021 will come from imports.

  Don't think that these imported grains are all provided by the West, in fact, many Chinese enterprises go overseas to "farm" and then export to China. In other words, these companies help the country to keep the control of food security in the hands of Chinese themselves.

Chinese enterprises in Ukraine to spend 100 million yuan desperately to cultivate land, in fact, to help domestic food security?

  These Chinese enterprises that grow grain overseas, Henan Huangpan District Industrial Group (hereinafter referred to as Huangpan District Farm) is a typical example.

  The Yellow Pan Farm is typical not only because it is rooted in Ukraine, which has been "troubled" in recent years, but also because it has made overseas agriculture flourish.

  To put it simply, in 2012, the Ministry of Land and Resources of Ukraine visited Henan and expressed its intention to invite Chinese agricultural enterprises to Ukraine for farm development, and the Department of Agriculture of Henan Province recommended the huangpan district farm. The following year, Huangpan Farm and The Ukrainian Dara Group jointly established Sino-Ukrainian Panda Agricultural Co., Ltd.

Chinese enterprises in Ukraine to spend 100 million yuan desperately to cultivate land, in fact, to help domestic food security?

  Invited to develop, Chinese enterprises initially faced not a vibrant "hot land", but a place with difficult conditions to be developed.

  In the first three years of coming, there was no broadband, no 3G mobile phone signal, and the infrastructure needed to be vigorously built, but all kinds of problems did not "force" expatriate employees.

  This is because the rent of agricultural land in Ukraine is quite low, the average profit of the planting industry is more than 20%, and the agricultural input and output are relatively high, which is worth "big deal". To this end, in recent years, Huangpan District Farm has invested more than 100 million yuan in efforts to cultivate deeply.

  By 2016, the total crop output of China-U.S. Panda Agriculture Co., Ltd. reached 16,000 tons, an increase of 66.3% year-on-year. In addition, due to the introduction of Holstein cows, the optimization of feed formulations has improved the total milk production and quality, resulting in the same year's fresh milk production reaching 3500 tons.

  Today, Huangpan Farm has 87,000 mu of land in Ukraine, including 58,000 mu of agricultural land and 29,000 mu of forest, and its business involves planting, breeding, deep processing of agricultural products, import and export trade, etc., and the company's total assets reach 7.36 billion yuan.

Chinese enterprises in Ukraine to spend 100 million yuan desperately to cultivate land, in fact, to help domestic food security?

  It can be seen from the specific business of the farms in the Huangpan area that most of the agricultural products grown in Ukraine take the import and export trade and are transported to the country.

  At the end of last year, media reported that the first batch of barley imported from Ukraine by the farms in the Huangpan District was cleared into storage at the Tianjin port on schedule, and the trade procedures for various high-quality Ukrainian agricultural and sideline products such as soybeans, corn, and sunflower meal had been prepared, and they would be imported back to China according to the deployment to further meet the domestic demand for imported grain.

  Behind this, the proportion of grains imported by China from Ukraine (covering a wide range of rice, wheat, millet, soybeans and other grains) is not small. In 2021, the proportion of Grain Imported by China from Ukraine will reach 16.4%, and Chinese enterprises such as Huangpan Farm will play an important role.

  In addition to Ukraine, Chinese enterprises grow grain in more places overseas, such as Huangpan Farm in Tajikistan to grow corn, wheat, etc., Hubei Agricultural Reclamation Lianfeng Overseas Agricultural Group and its cooperative team in Mozambique and other African countries to promote the cultivation of rice, corn, etc., the yield is two to three times the yield of ordinary local farmers, and Shanghai Zhongfu Group once spent 700 million Australian dollars to build a sugarcane and sorghum farm in Australia.

Chinese enterprises in Ukraine to spend 100 million yuan desperately to cultivate land, in fact, to help domestic food security?

  Some of these overseas grains are sold to local people or neighboring countries, and a larger part will be sent to China to "help" national food security.

  However, overseas agriculture is not without risks, for example, Ukraine's obvious regional "shock" has a certain impact on the production and transportation of Chinese enterprises.

Chinese enterprises in Ukraine to spend 100 million yuan desperately to cultivate land, in fact, to help domestic food security?

  Factors such as the huge initial investment in agricultural projects and the long recovery cycle are also prone to liquidity problems, and Henan Jingyan Yinhai Seed Industry Co., Ltd., which has cooperated with Huangpan District Farms for many times, has gone bankrupt and reorganized due to its inability to repay its due debts.

  These Chinese enterprises work hard overseas, sometimes need to face unpredictable personal risks and corporate risks, when we enjoy the food security pattern built by the country, we should not forget that they are also one of the groups that carry the burden forward, and they are also worth residge, right?

  Resources:

  1. "Ukrainian bag farms, Central Asian cotton, this province is desperately farming overseas", extraordinary fritters

  2. "Huangpan Industrial: Turning the Wasteland of Tajikistan into a Granary", Henan Radio and Television All Media

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