For those private equity (PE) investors targeting China, the farmyard is definitely the place to be right now. According to Dealogic, around $932 million was invested in the agribusiness and food and beverages sectors in 2009. So far this year the figure is $611 million. That’s up massively from $189 million in 2008.
The deal sheet is an active one. Hopu – the firm controlled by Fang Fenglei (see WiC25) – bought into Mengniu Dairy, as well as a stake in hog butcher, Yurun Foods. KKR acquired shares in dairy firm Ma Anshan Modern Farming; SAIF Partners took a stake in potato company Landun Xumei Foods and cornmaker, Jilin Sky Scenery. And a consortium including Blackstone and Warburg Pincus recently invested in a rural logistics centre, China Shouguang Agricultural Product Logistics Park.
Latest to China’s harvest festival: Prax Capital made its first investment in the sector in mid-April, providing $15 million in financing for fertiliser, pesticide and fungicide maker Rotam Global Agrosciences.
According to the Wall Street Journal it’s a significant movement of capital during an era of major change in the countryside. “Private equity investors are helping to move land consolidation and the industry’s professionalisation along.”
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