The Ao Hua Group is building a new feed production plant in the center of China’s crayfish production region.
Headquartered in Shenzhen, the Ao Hua Group – also known as Alpha Feeds – is investing CNY 180 million (USD 26.4 million, EUR 23.3 million) in the plant, being built near Wuhan in Hubei Province. The plant will have a capacity of 50,000 metric tons and will be operational later this year, the company said.
However, profitability in the crayfish sector remains challenging, with prices failing to keep up with a surge in output, according to Huang Wen Hu, head of the shrimp and crab business at Ao Hua. The break-even point is CNY 10 (USD 1.40, EUR 1.29) per 500 grams, but farmers this year have struggled to achieve this, according to Huang.
While crayfish profitability at farm-gate level was reduced in 2019, the company sees a path to success by encouraging farmers to bring their crayfish to market quicker through the use of better seedlings and nutrition, Huang said.
“There’s a need to speed up the growth cycle and get [the crayfish] out of the ponds quicker,” Huang said.
China’s crayfish industry was worth CNY 369 billion (USD 51.6 billion, EUR 47.7 billion) in 2018, a year-on-year increase of 37.5 percent, according to the “Crayfish Industry Development Report 2019,” published by the Ministry of Agriculture and Rural Affairs.
China’s aquafeed market has expanded significantly over the past year as producers like Ao Hua expand production to compensate for sluggish sales in other sectors such as pig farming. China’s per capita consumption of seafood averaged 46.4 kilograms in 2018, whereas the average Chinese ate 46.8 kilograms of the combined category of “beef, lamb, pork,” according to figures prepared by China’s Agriculture Ministry. Average consumption of seafood grew by 72.5 percent between 1996 and 2018, while consumption of beef, lamb, and pork grew 55 percent.
Most of the big players in China’s feed sector, including Ao Hua, are headquartered in Guangdong Province but have sought to expand their reach as the market becomes more competitive. Guangdong Haid and the Tongwei Group both have aquafeed plants across South and Southeast Asia. The Guangdong Nutriera Group (it also uses the Mandarin name “Lia Kun”) has also sought to expand sales in India, where shrimp production is being spurred by growing demand from China.
