Muyang in the Media

Growth in Chinese feed production spurs expansion

Date:2014-10-13 Source: Author: Browse: Font:LargeMediumSmall Print
Muyang, one of the largest feed machinery manufacturers in China, put its new Yangzhou production facility into operation in early May. With an investment of $212 million (RMB1.3 billion), this state-of-the-art facility covers an area of more than 82 acres (500 Mu) and features a large research and development facility. According to Chinas official medium CCTV, the new plant is the largest feed machinery manufacturing base in the world. For those familiar with the development of Chinas animal husbandry industry in recent years, an investment of this scale shouldnt come as much of a surprise, but the global market should take notice because it points to emerging trends within Chinas feed industry.


Demand drives investment

According to the estimation of the International Grains Council, global grain production will continue to grow until 2018 when the output of wheat and other coarse grains will surpass 2 billion metric tons, but prices are likely to rise rather than drop unless output exceeds estimations. and due to Chinas strong demand for feed and feed ingredients, the global grain inventory will have limited room to grow. As more people move to cities and meat consumption increases, the demand for protein requires more feed grains to sustain poultry and livestock. In order to fulfill the demands of the animal husbandry industry and to ensure consumers have enough food Chinas feed industry and producers must increase output. After producing 194 million tons of feed in 2012, China is the largest feed producer in the world. The question is: How will China use its limited resources to continually produce more low-cost, high-quality feed? Feed machinery companies seem to be part of the solution.

 

Chinas feed industry is quickly developing, and the demand for feed products is also increasing, thats why we planned and constructed our new [feed machinery manufacturing] facility, explains Liu Guangdao, vice president of Muyang. We needed to catch up. Feed producers need efficient equipment to produce high-quality feed. For that reason we needed to expand.

 

According to Liu, Muyang experienced a shortage of production capacity at its old facility, but thanks to the new one, it can produce 16 units of feed processing equipment every day by using its pipelining production system.

 

Quality from technical innovation

Given the challenges it has faced in recent years, the Chinese feed industry is focused on feed safety. Liu explains: Consumers are growing increasingly concerned with food safety issues, and they have also started to pay attention to the feed safety. We now have the responsibility to help feed producers solve the problem.

 

Taking aim at feed safety, Muyang made a large investment in its high-tech feed machinery processing equipment.

According to Wang Dong, Muyangs vice president and senior engineer, the company uses specialized robots in every sector of its machinery manufacturing, including material processing, painting, assembly and transportation. The welding robots, for example, weld with extra precision to produce high-quality, efficient equipment which in turn produces better feed.

 

To improve user confidence, the new facility introduced a barcoded labeling system, which enhances the traceability of all the feed products produced by the company's equipment.


Machinery delivers cost control

Muyang designs and produces large-scale automatic equipment, which reduces labor and production costs and the waste of raw materials, in an effort to aid in cost control for the end user.

 

The price of meat doesnt increase as fast as the cost of feed production, resulting in lower profitability for feed producers, says Liu. Were doing a lot of research at our new facilitys R&D center focusing on how to reduce the unit production cost and alternative ingredients

usage.

 

The company manufactures equipment for alternative feed ingredients processing.

 

In the past, our extruder could only produce feed with very specific ingredients that were rich in protein, such as fish meal, Liu says. Now with our new type of extruder, we can also use cassava and even feathermeal. By destroying the peptide bonds inside those alternative

ingredients, we can transform the proteins into a form that can be used by animals and human beings.

 

Muyangs new R&D center allows the company to conduct practical feed production experiments to ensure the quality and safety of the final product.

 

More concentrated industries

Estimates suggest there are more than 10,000 Chinese feed producers. Many of these companies are small, but this is changing.As the demand from downstream sectors increases and evolves, Chinas feed industry has become more concentrated, which offers better opportunities for feed machinery manufacturers.

 

According to Liu, many large feed producers have set up the perfect industry chain and manufacture their own feed formulations. This trend suggests China will have more large producers producing better feed products at larger volumes in the future. As a result, the demand for large-scale automatic feed processing equipment will rise.

 

This is also our chance, he explains. Our main target is the large producer and with our new facility put into operation, were able to offer the equipment to fulfill this demand. Meanwhile, our new logistic center can deliver products in much shorter time, serving them better.

 

In fact, by using advanced feed processing equipment, large feed producers are able to consolidate their leading position in the industry, further concentrating Chinas feed industry. From that aspect, a positive cycle between Chinas feed and feed machinery industries may occur.

 

It is quite obvious different feed equipment manufacturers have different customers, reflecting different developmental stages and market positioning, Liu explains. As large feed producers gradually take the leading position in the market, they are demanding its feed equipment manufacturers offer equipment to fulfill their needs. Viewing from this aspect, the concentration of feed machinery industry is increased by the development of feed industry itself.

 

Muyangs market share in the domestic market is almost 60 percent.

 

We are exporting 50 percent of Chinas feed equipment, Liu notes.

 

Targeting the global market

Chinese feed producers are increasingly being seen in the global market. While at first they only sold feed products, these companies have started to construct factories abroad. For feed machinery manufacturers, here lies another chance to grab market share. Muyang started its foreign business quite early even earlier than some feed producers and now has business in 102 countries, with 42 agencies and 10 branch companies.

 

[Moving business abroad] is a trend for both Chinas feed and feed machinery industries, Liu explains.

 

According to the U.N. COMTRADE statistics, China accounts for 10.3 percent of the total value of global feed machinery exports, ranking third after Germany and the Netherlands. Muyangs new facility will strengthen the companys global strategy.According to the plan, our annual output value will reach RMB20 billion by 2015, and exports will count for 50 percent of the total value, says Liu. This new facility means a lot to our foreign strategy. With better equipment production, foreign customers will have more confidence in the Muyang brand; and once the facility begins mass production, its experience can be used in its foreign bases and factories.

 

When talking about global market, Liu thinks it is impossible to avoid trade barriers and market resistance, but he also believes there is chance for cooperation.

 

We now have some cooperation with local companies, though its hard to transfer knowhow and technologies directly, but we can still learn from each other and develop side by side, he concludes.