EX-99.1 2 v204081_ex99-1.htm

AgFeed Industries, Inc.



Hong Kong Stock Exchange


Hong Kong

29 November 2010


Safe Harbor Statement

This presentation contains “forward-looking statements” within the meaning of the “safe-
harbor” provisions of the Securities Litigation Reform Act of 1995. Such statements
involve known and unknown risks, uncertainties and other factors that could cause the
actual results of the Company to differ materially from the results expressed or implied by
such statements, including changes from anticipated levels of sales, future national or
regional economic and competitive conditions, changes in relationships with customers,
access to capital, difficulties in developing and marketing new products, marketing
existing products, customer acceptance of existing and new products, and other factors.  
Accordingly, although the Company believes that the expectations reflected in such
forward-looking statements are reasonable, there can be no assurance that such
expectations will prove to be correct. The Company has no obligation to update the
forward-looking information contained in this presentation.


AgFeed: An Overview

An international agribusiness leading the
modernization and integration of the Chinese
hog & animal nutrition industries

Animal Nutrition

Harvest Initiative

Hog Production

AgFeed Industries, Inc.

An International Agribusiness


AgFeed: Profile

AgFeed Industries, Inc. is a, NASDAQ listed company operating in China; ticker symbol FEED.  It is
also listed in Europe, NYSE Alternext: ALHOG


AgFeed is focused on becoming a fully integrated market leader and already has a leadership position
in two of the three core business areas:

Animal Nutrition, including additive premix, concentrates and complete feeds

The Chinese feed industry is a $58.0B of which pig feed is $20.5B

Hog Production 625 million head slaughtered in China (2009) versus ~100 million in US

AgFeed operations are currently comprised of the following:

31 farms in China & 10 sow farms with a 200+ farm finishing system in the United States

2,000 employees

5 feed mills

USD in millions






Animal Nutrition






Hog Production






Total Revenue







M2P2 Acquisition: Transforming AgFeed

Establishes AgFeed as an international hog production company positioned to
respond to global opportunities for growth and development

Growth opportunities exist in; China, the United States and Southeast Asia

This business combination will double our revenues

M2P2 produces 1.3 million market hogs per year

M2P2 brings to AgFeed the hog production industry’s leading team with a proven
record of outstanding performance as measured by numerous metrics

M2P2 operates in; Iowa, Colorado, North Carolina and Oklahoma

In partnership with local government we are developing our western production
pods (7 farms) in Dahua and Xinyu under M2P2’s leadership


Operating & Organizational Structure

AgFeed Animal Nutrition, Inc.


Chinese Production System

Existing 31 Farms

M2P2 (U.S. Production)

Western-Style Farms
(Dahua and Xinyu
Production Pods)

AgFeed International Protein
Technology (AFIPT)

Harvest Initiative

AgFeed Industries, Inc.

An International Agribusiness


Business Strategy: AgFeed, Government & Farmer

Recognizing the cultural and political significance of the Farmer and the vital role
of Government our core operating philosophy is: AgFeed, Government & Farmer

Government (local & regional) works with us to secure the land necessary for
developing our new western-style farms, to put in the necessary infrastructure of
roads, power and water and to coordinate our local farmer relationships

Local farmers, in partnership with AgFeed, “finish” pigs from 40 pounds to market

AgFeed provides; training, feed, nutritional and veterinary support and insulates
the farmer from market risk, providing farmers with employment and income

AgFeed leverages its operational expertise and human capital while establishing
a production base of high quality, verifiably safe pork


AgFeed: Profile

- feed mill

- hog farms


AgFeed: Profile

Animal Nutrition

Founded in 1995 by animal nutrition experts.  The animal nutrition business
produces additive premix, concentrates and complete feeds

AgFeed has exclusive distribution arrangements with approximately 1,300  
independently owned retail stores and serves over 790 commercial farms.


Currently 31 farms with a capacity of 600,000 market hogs per annum.

Construction of two production pods with a total of 35,000 sows and market hog
capacity in excess of 850,000 head.

U.S. production system producing 1.3 million market hogs annually.


AgFeed is moving forward in completing the development of a fully integrated
production system controlling all aspects of production and processing in a safe,
verifiable and auditable system

AgFeed’s processing business will initially be scaled to harvest 2,000,000 hogs per
year, AgFeed’s 2015 targeted controlled production.


China Dynamic: Macro

Pork production in China is a key political, social and security issue and  
promotes the  advancement of science, technology and health standards

The “Food Safety Law” went into effect June 2009 providing a legal basis for
the government to strengthen food safety

Economic growth in China is driving the consolidation and
commercialization of
pork production using the Western model

Meat demand and production strains continue to increase as China’s 250
million        middle class grows due to rapid urbanization. 20 new cities
planned with a 100 million people projected to move to urban centers by


China Dynamic: Agricultural

Pork consumption accounts for 63% of the meat consumed in China
and is expected to grow at rate of 22.3% from 2009 through 2013

Projected pork demand by 2015 will approach 68 million metric tons up
45% from  46 million metric tons in 2009

Government intervention through the PRC’s Ministry of Commerce in
the hog market through the Hog Reserve operations is standard

China has 22% of the world’s population but only 7% of the world’s
arable land


Animal Nutrition

Retail distribution through approximately 1,300
exclusive, independently-owned retail stores

More than 790 large commercial direct hog

AgFeed’s 5 manufacturing facilities which are
strategically located in Nanchang, Nanning,
Hainan, Shandong and Shanghai

AgFeed enjoys a large distribution footprint in
China’s animal nutrition market

Significant growth opportunities still remain as a
result of consolidation

Strong brand loyalty and recognition


Animal Nutrition

There is a growing demand in China's larger, more sophisticated live animal
production systems to utilize complete feeds. We have demand from over
half of our commercial accounts for delivery of complete feeds

The Food Safety Laws passed in 2009 are accelerating the consolidation of
the feed industry.  In 2007 there were 15,000 feed mills in China with
average production capacity of 10,000 tons p.a. today there are less than
11,000.  We expect this trend to continue and accelerate

AgFeed’s total feed sales were 117,000 metric tons in 2009 versus 74,500
metric tons in 2008

The Chinese feed market is expected to grow 38% over the next 4 years


Hog Production: China

AgFeed acquired 31 hog farms in 2008 with the capacity for 30,000 sows and
production capacity of 600,000 market hogs

Commenced development of 7 western-style, technological advanced, hog farms
with capacity for 35,000 sows and production capacity 850,000 market hogs

New western farms will enter production in Q4 2011

We are a market leader in China, less than 2% of hog farms nationally produce
over 500,000 market hogs annually

Our production target for 2015 is 2,000,000 market hogs annually making AgFeed
a top 5 producer in all of China


Hog Production: United States

AgFeed acquired M2P2 in September 2010 establishing a significant market
presence in the United States

The M2P2 production system is comprised of 10 sow farms in: Colorado,
Oklahoma and North Carolina and a contract finishing system of over 200 farms in

Our U.S. production system is the industry leader in terms of all productivity and
efficiency metrics

Producing 1.3 million market hogs annually ranks our system as #23 in the U.S.

The industry leading team of managers and executives at M2P2 has added
significant depth and breadth to our human capital resources

Significant growth opportunities exist in the U.S. for highly efficient producers


Harvest - Processing

Harvest (slaughter, processing & marketing) initiative was launched in 2010
representing AgFeed’s final step in deploying a fully integrated hog production

Harvest facilities will be located and scaled to serve the production output of our
western-style farms in Dahua and Xinyu

Harvest business initiative will enable AgFeed to capture additional margin
through value added slaughter and processing

We expect the fully integrated production model assuring verifiably safe pork and
standard processing will be attractive to major international distributors

Our production facilities will be ideally located to serve the growing urban markets
of southeastern China


Business Strategy: Importing Expertise & Technology

Improving efficiencies in our existing farm system is driven by importing and
implementing technologies and procedures to improve yields and feed conversion

Assuring continual access to cutting edge technologies, methods and procedures
AgFeed has entered into joint ventures with market leaders; Hypor Genetics, PIC
& M2P2

Hypor and PIC are the world’s largest suppliers of advanced swine genetics
providing the most technologically advanced breeding stock to both our
established farms and our new western-style farms

M2P2 is a leading innovator in hog production in the U.S. and is our joint venture
partner in the development, design, construction, start-up management and
training for our western-style farms


Milestones: 2009 & 2010

Record revenue for 2009 & first half of 2010

Implementation of genetics program

Western Farm Progress: Dahua & Xinyu

M2P2 Acquisition

Feed Division - AgFeed Animal Nutrition (“AANI”) carve out

Harvest Initiative

Expansion of Shareholder Base


Summary: Investment Highlights

Pork will continue to dominate the
protein market in China

Significant and growing demand for
“safe” meat products

All our operations, technologies and
procedures are focused on assuring
and delivering “safe” pork to the
Chinese consumer

We are a leader in modernizing and
integrating the Chinese hog industry

We have already achieved scale to be
a top 5 producer in China and will
continue our growth rate

Broad dedicated distribution network
for our nutrition products

Ideally located to serve China’s
growing southeastern urban markets

China’s demand for “safe’’ meat products

Source: MOA, Rabobank estimates, 2009










We expect continued growth as we execute our plan for the expansion of our western-
style, technologically advanced farms, the growth of our animal nutrition business and
the development of our Harvest strategy and operations.  Integrating and modernizing
the Chinese hog industry to assure “safe” pork is available to the Chinese consumer.