Chinese firms partner on corn feedstock

Origin Agritech Ltd., an agriculture technology company, announced Jan. 4 that it has signed a collaborative agreement with BaoDao Feed Ltd, a Chinese feed producer with $78.68 million in annual sales, to produce and sell specialized corn crops to feed producers.

Origin said the corn variety that it brings to the collaboration contains 160% higher crude fat content than conventional corn as well as higher amino acid content, eliminating the need for costly additives, a desirable trait for feedstock. The companies estimate a resulting cost savings of about $31 to $47 per tonne, which would effectively double the gross margins compared to BaoDao’s sale of conventional corn as feedstock.

The total market for corn feedstock in China is 50 million tonnes per year, which equates to potential net profits of $23.6 billion. BaoDao estimates that the companies will reach 10 million tonnes in sales within three to five years with this collaboration.

“We are very excited to be opening up this new line of business,” said Dr. Gengchen Han, chairman of Origin Agritech. “We have gotten to know our customers and listened to their needs and let that drive our development of innovative new corn varieties. This partnership validates our customer-centric approach.”

Origin Agritech Ltd. was founded in 1997 and is headquartered in Zhong-Guan-Cun Life Science Park in Beijing. It is a leading Chinese agricultural technology company in crop seed biotechnologies.

WORLD-GRAIN.com

Tags: Market, Origin Agritech Ltd., BaoDao Feed Ltd, corn crops, feed producers, corn