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Liu Chang takes over from the first show to talk about transformation. New Hope Six and 8.8 billion pork and meat sales

2019/02/27 18:27
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Tencent Finance and Economics News (Li Wei) Liu Chang's latest identity is a happy mother of dragon and phoenix, who has just returned to her office after the Spring Festival. However, the work did not stop completely during the vacation period. In May 2013, Liu Chang took over from his father Liu Yonghao as chairman of New Hope Liuhe Co., Ltd. Over the past three years, this huge farming and animal husbandry enterprise has struggled to transform silently. Liu Chang, who is a knife-driver after 1980, and her co-chairman Chen Chunhua, President Li Bing and other core management are eager to expect the company to sell not only feed, duck and chicken, but also more pork and meat.

Liu Yonghao's family ranked 26th on the Forbes China Rich List in 2015 with 31.12 billion yuan. Liu Chang's actions and successes are often given more meaning. She has always been one of the typical representatives of the second generation succession of Chinese private enterprises. Now Liu Chang and her board of directors are tasked with transforming New Hope Liuhe from a feed-based company into a whole industry chain group covering feed processing to livestock and poultry breeding, slaughtering, meat processing and terminal sales.

Behind Buying Benxiang Agriculture: Three Years of Transition

A February 17 announcement made public the three-year low-key transition plan. New hope six and Limited by Share Ltd acquired 70% stake in Ben Xiang agriculture, the latter has 300 thousand pig breeding capabilities, and more than 200 thousand in 2015. The acquisition means that New Hope Sixth Harmony will lay out the northwest pig farming market in order to rebuild a new economic growth pole. Previously, New Hope Six and the breeding business, but the scale is not large, mainly in Hebei, Sichuan and Shandong Province.

On the same day, New Hope Liuhe also announced a detailed breeding plate plan, with an investment of 8.8 billion yuan, to develop 10 million live pigs in three to five years by means of company + family farm, covering 20 million live pigs through technical trusteeship and technical services.

Previously, during the suspension period of nearly half a year, New Hope Liuhe took frequent actions. He successively joined Blue Star Trading Company, an independent U.S. food and commodity trading company, and then announced the acquisition of Jiujiuya, a terminal food chain. The latest part of this chess game was the acquisition of Benxiang Agriculture.

On February 23, Liu Chang explained the transformation plan to Tencent Finance and Economics in detail: "In fact, we started to arrange this transformation three years ago, from the last old directors to the new team. (Each plate) whether it is human, financial and proportion will be adjusted accordingly. In the past, we started to make feed, but today feed is still very profitable; but three years ago, we saw that it will become more and more difficult in the future: feed competition is very big, profit margins have been declining, it is obviously impossible to make money by feed in the future, so we began to transform the layout in advance.

Three years ago, it was also Liu Chang's time to take over from behind the scenes. Chanel goose yellow skirt, shawl curly hair, in May 2013, Liu Chang appeared as chairman, standing beside her is co-chairman and CEO Chen Chunhua, Liu Yonghao's selected teacher for her daughter, Chen Zenghe was president of Liuhe Group and many well-known enterprise consultants.

Long ago, Liu Chang used to be the owner of a clothing store on Chunxi Road in Chengdu. He was a very small shop, and needed to go to Yiwu and Guangzhou to buy his own clothes. Before her short career as a shopkeeper, she spent her schooling time at a girls'school in Seattle. After returning home, she studied MBA in Beijing and joined her father's company under a pseudonym, starting from the grass-roots level step by step. Later, she worked in a number of enterprises under New Hope, and emerged around 2010.

Make farming and meat products a new profit point

Now teachers Chen Chunhua, President Li Bing and Liu Chang are transforming as core management. In the first half of 2015, the income of the feed sector of New Hope Liuhe reached 20.1 billion yuan, with only 9.4 billion yuan for meat and 1.1 billion yuan for breeding, respectively. In the future, management hopes to reverse the proportion, with a small proportion of feed, and a larger proportion for breeding and meat.

Liu Chang said: "Now we are going to adjust our strategy to both ends, so that more talents will be deployed to the breeding end and the food terminal. In the middle, such as feed, we need to change from the former profit department to the means of production department."

One of the key points of the transformation is aquaculture, which is also the most difficult point in the whole industrial chain. Before the middle of 2015, the pig market experienced more than two years of losses, and a large margin, a pig loss can reach 350 yuan. How can New Hope Pigs Resist these Pressures? Liu Chang said, "There must be fluctuations in the aquaculture industry. Small businesses can not resist this risk, but large enterprises are good, because of the technical support and the overall advantages of the industrial chain. When the epidemic comes and the climate is not good, we have many plans. Next, the company should change from feed profit to breeding profit. The breeding itself is not intended to make profit. It should make profit from selling pork and from selling feed to selling good meat*

According to the plan, the new hope six and the business model that will be sold from the feed sale to the commercial mode of selling pig products, that is, "efficient production of internal feed, pig and pig seedlings + planting and breeding integration, family farm cooperation and stocking, part of the supporting fattening farm", in the medium and long term, the company will become a provider of fresh meat and meat products. New hope will invest 1.8 billion yuan to establish a new platform for pig breeding management, service and investment. Pig industry companies will be established in Shandong Pian*Lian, Chengdu Pian*Lian, North China Pian*Lian and Central Plains Special Zone respectively to engage in pig raising business.

The other end of the transition is how to connect consumers. Liu Chang said, "we have to keep a pig and a chicken well, without drugs and residues. The other end is the consumer side, there are many things to do. Now there are thousands of paper cranes in the north, beautiful cranes in the south, and Benxiang in the northwest. We will do more brand exploration in the future.

Seeking Investment and Cooperation Upstream and Downstream

New Hope Liuhe assists transformation through acquisition. On October 29, 2015, New Hope acquired a 20% stake in American Bluestar Trading Group Co., Ltd., becoming the second largest of the latter.