Chinese crustacean specialist Guolian Aquatic has a new deal that will ensure it has an adequate supply of feed for a newly announced offshore aquaculture project.
Guolian recently announced an agreement with the soy-focused Dongling Group (also known as Donlinks) to build a 300,000-ton capacity feed production plant in Guolian’s hometown of Zhanjiang in Guangdong Province. Guolian will take a controlling 51 percent stake in the new joint venture, with capacity added in stages.
The feed will be required to realize a recently publicized blueprint from Guolian that outlines a plan to grow production of premium carnivorous species, including giant grouper and pomfret, in a planned development of 2,000 offshore cages off the Guangdong coast, requiring CNY 2 billion (USD 282.8 million, EUR 260 billion) in investment.
Dongling also has aquafeed production deals with both Louis Dreyfus and Guangdong Haid. Louis Dreyfus, which took a hit from the Chinese swine flu epidemic, has signed up with Dongling to produce aquaculture and “bioenergy” at the latter’s base in Nansha. This follows a separate deal with Guangdong Haid Group, signed in May 2019, for a “high-end” aquafeed production plant in Tianjin, which will have capacity to produce 300,000 tons for feed annually. Haid is a director competitor of Guolian, as both firms produce feed, and Guangdong Haid is building shrimp feed plants and shrimp farms in Latin America.
Guolian’s plan for its expansion into offshore cages is dependent on financial support from the Xuwen county government, which controls the shoreline and sea rights in the area of the proposed farms. But Guolian, which already has 150 cages of 90-meter diameters and another 50 with diameters of 60 meters, is planning to expand further due to the higher profits it earns from premium fish. The company makes a profit margin of 300 percent on giant grouper and 25 percent on pomfret, with both species sold live to seafood restaurants across China, according to research documents on the firm published by two brokerage houses, Xing Ye Securities and Chang Jiang Securities.
Guolian’s choice of Donlinks comes as a slight surprise, given it has heretofore lacked interest in the crossover of the soy sector into aquaculture. Instead, Guolian has invested in an oilseeds-crushing and -processing facility. It also has interests in the petroleum market.
