KKR Ding Hui Modern animal husbandry joint venture to build pasture

The private-equity firm KKR, CDH Investment and modern animal husbandry 24th announced the establishment of a joint venture to provide Chinese consumers with quality raw milk. Under the terms of the agreement, KKR, CDH and modern animal husbandry will jointly build two large dairy pastures in China in the next 18 months, with a total investment of about 140 million U.S. dollars. The joint venture company plans to build Hooke′s ranch in the next two years. Pasture is located in Shanghe County, Shandong Province, the weather conditions suitable for dairy cattle breeding, and received strong support from the local government. KKR, CDH and modern animal husbandry will hold 61.5%, 20.5% and 18% of the joint venture companies respectively. The joint venture will buy the surplus cows produced by the natural breeding of modern livestock herds. In addition, modern animal husbandry can repurchase the joint-venture Ranch equity after three years to ensure its long-term growth potential. The deal is still subject to regulatory approval and is expected to be completed in the fourth quarter. KKR will invest in the joint venture through its China Growth Fund (growth Fund). KKR Denghui in 2008 to invest in modern animal husbandry. Since the investment, the scale of modern animal husbandry from 3 pastures, 24,000 cows gradually developed into today has 22 pastures, nearly 180,000 cows of large-scale animal husbandry group. In the 2010, modern animal husbandry was successfully listed on HKEx. Golina, president of modern animal husbandry, said: "The growing demand for quality dairy products has led to a strong rise in demand for high-quality raw milk in large pastures." Following our successful cooperation, modern animal husbandry has again opted to work with KKR Denghui to set up a new joint venture, which will help meet the Chinese market's demand for safe and quality raw milk. "The management team of modern animal husbandry is acutely aware of the huge demand for safe and healthy milk," said Liu Hai, KKR Global partner and president of Greater China. Large-scale pastures operated in the international leading management model are the best solution to this demand. Today, the issue of food safety is still the most important, and the investment helps to increase the supply of quality raw milk for Chinese consumers. "According to market research institute Euromonitor Statistics, the past five years, China's dairy consumer market composite annual growth rate of 10%, due to consumer food safety concerns and increasing health awareness, the demand for high-end high-quality dairy products faster than the overall market, so that high-end dairy market share from 10 % up to 19%. Despite the strong growth, China's annual per capita annual liquid milk consumption is still below 10 kilograms, while Japan and the United States per capita annual liquid milk consumption is 32 kilograms and 78 kilograms respectively.