Chapter 246 Soybeans
Magic City.

Bunge Shanghai was established in 2000 and is a wholly-owned subsidiary of Bunge Group, one of the four major grain traders.

Du Sen is the general manager of Bunge Magic City Company. He wears a white shirt, has a short flat head, black-framed glasses, and has a slightly dark skin.

"Su Xin, the headquarters plans to invest in a grain and oil company in Tianjin, and you will be in charge of it temporarily."

In the conference room, a refined woman looked slightly surprised.

She was a director of Rizhao Sanwei Oil in Shandong Province, but in the nightmare of 2004, the original soybean processing plant slipped into the abyss of total losses.

It was eventually acquired by Bunge.

In her opinion, "being eaten up by foreign capital" is a rational but helpless choice.

Sanwei was able to be acquired by Bunge because it was large enough and was one of the leading companies in the industry. Other small and medium-sized enterprises would have been eliminated.

Su Xin asked doubtfully, "Aren't we still negotiating cooperation with Jiusan Grain and Oil?"

Du Sen said: "ADM and Cargill have also been in contact with Jiu San Grain and Oil, and Jiu San has been wavering, and it may not end up in our hands."

After entering China in 2000, Bunge took only four years to become the country's largest soybean importer.

Su Xin is well aware of its terrifying nature. After gaining an absolute advantage in soybean trade, she has been continuously expanding into the soybean processing field in the past two years.

Are Sanwei Oil and Jinling Grain and Oil Processing Plant now heading towards Tianjin?

Su Xin asked curiously: "What is the scale of investment this time, and what is the estimated production capacity?"

Du Sen raised his head and said, "I spoke with Albert Wiesel, the global CEO of Bunge, on the phone today. The investment scale this time is 10 billion yuan, and the annual soybean processing capacity is expected to reach 200 million tons."

The whole audience was shocked.

This investment and production capacity is equivalent to the sum of the previous two factories. Someone asked: "Should the cooperation negotiations with Jiusan Grain and Oil continue?"

Du Sen said firmly: "Yes, Albert means that if he cannot acquire a stake in Jiu San, he will invest in another factory of the same size later."

Everyone looked at each other.

Is Bunge so optimistic about China's soybean crushing market?
This is the question raised by the people present.

In fact, they all know that the domestic crushing industry has already experienced serious overcapacity.

In the past few years, Bunge's stake in joint ventures has generally not exceeded 30%.

Bunge headquarters does not want to take risks in soybean processing or make money through processing.

They just want to control these companies' soybean purchasing rights and then sell the soybeans.

...

Lujiazui.

ADM has also completed its domestic layout.

Chen Changtao only felt that after running around outside for several months, his belly became rounder and rounder.

Last year, the 4.5 million yuan Sino-foreign joint venture Yihai Grain and Oil project settled in Shijiazhuang.

In March this year, the 3 billion yuan Yihai Industrial Park project settled in Lianyungang Development Zone, aiming to build the country's largest grain, oil and fat processing base.

What excites him most is that just a few days ago, a grain deep processing project with a total investment of 10 billion yuan settled in Jiamusi.

It will become the largest grain and oil deep processing enterprise in Heilongjiang Province, and deeply engage in the fields of grain processing and biomass energy power generation.

This also marks that ADM is about to enter Northeast China, and Wilmar International's goal of monopolizing the domestic non-GMO soybean market is within reach.

At the same time, Wilmar International will also be able to enter major food products such as rice, wheat and corn.

In fact, these investment projects have nothing to do with Chen Changtao.

But Wilmar International, Singapore's Wilmar International and ADM are grasshoppers tied to the same rope.

At this time, Yihai’s deputy general manager Tu Changming ran in in a panic.

Chen Changtao frowned and scolded, "Why are you panicking? Is the sky going to fall?"

"Boss, there are rumors that Jiusan Grain and Oil plans to sell 49% of its shares, and many companies have already contacted us."

Chen Changtao stood up in disbelief. "What? Where did you get the news?"

"I don't know! But it's being spread all over the place."

Chen Changtao paced in the office, thinking that the domestic soybean industry had already been severely damaged after being forced into liquidation by international traders three times in a row.

It then controlled more than 80% of the country's soybean import rights and about 40% of the crushing capacity.

Whether voluntarily or forced, Chinese oil and fat companies have allied with foreign capital. Even the eight oil and fat processing companies under the China National Grain and Oils Corporation are mainly foreign-funded.

Only Jiusan Grain and Oil, currently the largest soybean crushing company in China, is a company that is 100% controlled by the Beidahuang Agricultural Reclamation Group.

It is also a tough nut that foreign capital has never been able to crack.

But if you think about it carefully, Jiusan Grain and Oil may really have reached the end of its rope.

……

Xue Liqiang never dreamed that Jiusan Grain and Oil would become the last guardian and lonely flag bearer of China's oil and fat enterprises.

Jiusan is currently the largest processor in China.

The apparent daily crushing capacity is 1.5 tons, but how much of the production capacity is being maintained?

The loss for processing one ton of domestic soybeans is 600 yuan, which means that if the production is liberalized, Jiusan Grain and Oil will lose 900 million yuan every day.

No matter how wealthy one is, one cannot withstand such a ordeal.

So, Jiusan Grain and Oil compromised.

Since last year, it has set up factories in Dalian, Tianjin and other places to process imported genetically modified soybeans to offset the losses caused by processing domestic soybeans.

Survival is more important than anything else.

However, when Jiusan Grain and Oil, which mainly purchases soybeans from Northeast China, also starts to process imported soybeans, who will the Northeast soybeans be sold to?
A phone call came in.

connected.

A steady voice came, "Li Qiang, I heard that you want to sell Jiusan Grain and Oil?"

The voice was familiar. He belatedly looked at the incoming call and immediately came to his senses. His eyes lit up, "Director Nie!"

National Food Administration.

Director Nie smiled and said, "Just after I published a report, I heard that Jiu San Grain and Oil was negotiating with foreign investors to sell its shares."

Xue Liqiang perked up and said confidently, "Those are just rumors in the market. ADM, Cargill, and Bunge have indeed always wanted to cooperate with Jiusan Oils and Fats Group.

But the principle of Jiusan Oil is that anyone with a factory in China will be turned away. But without policy support, Jiusan can’t hold on! "

Director Nie said: "The soybean issue is also a headache for the Ministry of Agriculture, but an industry report involving several departments has been approved."

Xue Liqiang's eyes lit up. He had also participated in the soybean industry research report, so he quickly asked, "What about foreign investment in domestic soybean companies?"

"The superior instructed: According to the law, there will be some management."

Xue Liqiang frowned, "Director Nie, if this kind of merger and acquisition continues without restriction, the complete collapse of the domestic soybean industry is just around the corner.

The price of soybeans is already lower than the cost of planting. The agricultural tax exemptions and direct grain subsidies granted by the state have all been eaten up by the market, leaving farmers with no profit at all.

It is estimated that the soybean planting area will decrease by more than 50% this year. Once it decreases, it will be very difficult to recover. "

Things are indeed tricky. The existing soybean crushing capacity is more than 2.6 times the actual demand, and the industry's operating rate is less than 40%.

Overcapacity is terrible for Chinese companies, but this is the best time for foreign capital to carry out full-line mergers and acquisitions.

Director Nie thought for a while before speaking: "We are currently studying to support several state-owned holding companies that process more than 50 tons of soybeans annually as an emergency measure."

Xue Liqiang said: "We also need to find a way to preserve this year's soybean planting area."

"What do you suggest?"

"Let's find helpers and encourage some private enterprises to come in, such as Jiahe Group!"

Director Nie was surprised for a moment and thought carefully. There were 12 policy recommendations in the soybean industry research report submitted by the Institute of Food Science.

Among them, we support leading soybean enterprises, establish soybean planting bases, and diversify domestic investment...

He also knew something about Jiahe Group, a leading company in the seed and forage fields, but it seemed that it was not involved in soybean planting and processing!
Director Nie asked: "Does Jiahe Group intend to enter the soybean industry?"

"No."

Xue Liqiang said: "But Tianhe Seeds, a subsidiary of Jiahe, has the best soybean seeds in China: Tiandou No. 1."

"Monsanto's newly launched Roundup 2 has increased soybean yields in North and South America from 380 kilograms per mu to more than 450 kilograms per mu. Only Tiandou 1 can compare with this yield."

In fact, Xue Liqiang didn’t understand why Jiahe was unwilling to get involved in the field of grain processing.

It is obvious that it has achieved brilliant results in the fields of corn and soybean seeds. Wouldn’t it be better to open up the upstream and downstream industrial chains?

Director Nie said: "I will talk to Minister Lin about this matter. It would be better for Jiahe to communicate with the Ministry of Agriculture."

Ended the call.

Xue Liqiang just felt that releasing the false news this time achieved the desired purpose.

Foreign capital has basically controlled the processing industry and is now also affecting the downstream planting industry.

A consensus has been reached in the soybean industry: the only way to survive in this industry is to cooperate with foreign capital, implement groupization, utilize the negotiation power of large manufacturers, and reduce procurement costs.

To put it bluntly, it means bowing to foreign capital and begging them to purchase genetically modified soybeans.

This concerns the country's food security, and the top leaders cannot remain indifferent.

The reason why they wanted to bring Jiahe Group in was that except for Jiusan, the oil and fat companies under the National Grain Group were not purely domestically-owned.

Xue Liqiang valued Jiahe’s seeds, innovation and strong financial capabilities.

Jiusan Grain and Oil is backed by the Beidahuang Agricultural Reclamation Group and owns 4300 million acres of land. Even if all of it has been contracted to farmers, it still has a certain degree of control.

……

Hainan in May was already filled with tropical scenery, but Guo Yang had no intention of sightseeing.

He visited three cities and counties in the southern breeding base: Sanya, Ledong and Lingshui.

The weather here is sunny, the temperature is high and the soil is good. Hainan Agricultural Reclamation Farm and Military Farm have been operating here for many years, creating good production conditions.

But at the same time, the rent is also expensive, and there is a large land use conflict with vegetable planting and hybrid rice seed production. Even Tianhe Seed Industry’s seed production base has always been insufficient in area.

It was not until Guo Yang gave instructions that Tianhe took over several pieces of abandoned land one after another.

Guo Yang followed Yan Qun and the production staff, walking in the muddy fields.

Wei Shuyang, who was leading the way, kept looking back, "We're almost there, it's right in front."

Remote, poorly drained, and with no access to the fields, this was Guo Yang's first impression of the newly rented land.

After arriving at the destination, we looked at the uneven land, which was littered with rocks and overgrown with weeds. In some places, there were trees as thick as arms.

No one knows how deep the water is. It is very likely that the buffaloes will get stuck in it and won’t be able to get out when they try to plow the fields.

Guo Yang panted heavily and remained silent for a long time.

Yan Qun looked at Wei Shuyang and asked, "Why did you rent such a shabby place?"

Wei Shuyang replied: "There is only this kind of wasteland with no water and no roads." The southern seed production coincides with the peak vegetable season in Hainan in winter. When he came, Guo Yang saw countless vegetable gardens on those well-drained and irrigated fields.

Guo Yang paused and said with a smile: "It's okay, as long as we have the land, it will be difficult for others to snatch this kind of abandoned land from us after it is transformed."

Wei Shuyang said: "It's like this, the farmers nearby have all gone out to work."

Guo Yang asked: "How big is this piece of land?"

"It's about 1100 acres. At first, bananas were planted there, but later pumpkins were planted without leveling the land, so now it looks like this."

"If we want to restore the fertility of the fields, make them suitable for irrigation and drainage, and make them suitable for production and planting, we will have to spend a lot of effort to transform them."

Guo Yang observed the land and said in a deep voice, "Is the situation the same for other plots of land?"

“Yes, it’s basically all abandoned land.”

“We have also leased some land near the central area, but the soil there is sandy and leaks badly, so we need to keep it watered all the time.”

Guo Yang stood there discussing with several people.

After this expansion, the area of ​​Nanfan’s seed production base has reached 10 acres.

However, there are still nearly 5 acres of newly contracted abandoned land with no water, roads or electricity.

Building roads, digging ditches, laying electricity, digging wells, reclaiming land for cultivation, and reclaiming farmland, the cost of transformation per acre is about 1500 yuan.

The annual rent is 500 yuan.

After the renovation, the price may rise to 1000 yuan or even 1500 yuan per mu.

But even so, under the advice of Yan Qun and other Tianhe management, Guo Yang still chose to invest in Nanfan.

There was no other reason, it was just because he had witnessed the power of multi-generational reproduction two days ago.

The disadvantages of seed production in the south are that there are many rats, insects and diseases, and the cost is high and the losses are huge.

However, from the end of October to May of the following year, it was able to reproduce continuously for two generations. In these two generations, the soybean yield of Tiandou No. 10 harvested more than 5 million kilograms of seeds.

However, at the southern breeding base of the Shandong Academy of Sciences, Guo Yang also witnessed the early pod picking technology that can be used for three consecutive generations of reproduction.

Hainan has plenty of sunshine and less rainfall in winter. South of Wuzhi Mountain, especially from Sanya to Yacheng, there is basically no rain in winter.

It also allows soybeans to be grown in just 50 days from sowing to harvesting, followed by 15 days of shade drying, so a generation only takes 65 days.

The speed is faster than one can imagine. No wonder breeders go to Hainan without any hesitation as soon as winter comes.

This was completely beyond Guo Yang's understanding.

The backwardness of domestic soybean breeding is more due to non-war sins than the lack of outstanding scientists.

At the same time, it also further strengthened Guo Yang's southern breeding strategy.

Hainan can propagate three generations, and the inland can propagate another generation, which means that the seeds cultivated by Guo Yang from the seed store can propagate four generations in a year.

The transformation from original species to commercial species can be achieved directly. Guo Yang only regrets that he did not discover the secret of southern breeding earlier.

It is mainly influenced by habitual thinking: Hainan is a traditional breeding base.

Every winter, scientific research institutions and universities across the country come to Hainan for breeding of summer crops such as rice, corn, and cotton.

But except for hybrid rice, this place is not suitable for soybean and corn seed production.

However, for Tianhe, the profits brought by seeds are high enough to speed up the propagation process, so doubling the cost is completely acceptable.

In the following months, Tianhe invested more than 70 million yuan and mobilized excavators, bulldozers, laser levelers, lawn mowers, motorized boats and a large number of manpower to level, dig ditches, build roads, fertilize, clear weeds and repair ridges on tens of thousands of acres of wasteland in Sanya, Ledong and Yacheng, turning the original barren slopes and stagnant water into fertile fields.

It has become an important part of Tianhe's seed production industry layout.

……

After some operations, 3000 million kilograms of soybean seeds from the South China Breeding Base have been sold in batches to saline-alkali lands in various coastal areas.

Selling this amount of seeds to the Northeast will not change the overall situation.

Therefore, after discussion, this batch of Tiandou No. 1 will be used for saline-alkali land improvement.

The situation of saline-alkali land improvement is very hot, farmers from all over the country are full of enthusiasm, and the transfer area of ​​coastal saline-alkali land has already exceeded 10 million acres.

However, there were only 1 million kilograms of alfalfa No. 1700 seeds, enough to sow 680 million acres of land, resulting in a seed gap.

Then use Tiandou No. 1.

Its salt-alkali tolerance is also among the best, and it can also improve the soil, which is a supplement to the domestic soybean planting area.

The Ministry of Agriculture and Jiusan Grain and Oil both contacted Guo Yang.

Guo Yang also agreed to contribute to the development of domestic soybeans and enter the soybean processing field. In fact, this was also part of Jiahe's future strategic layout.

Jiahe may get involved not only in the processing of soybeans, but also corn, rice, and even potatoes and cotton.

But Jiahe is a private enterprise, so there is no need to publicize these things in a big way, just keep a low profile.

All month of May.

The seed business of Tianhe and Alfalfa has gradually come to an end, and Tianhe Seeds has basically achieved 100% repayment.

Only alfalfa, the first crop of forage in the new year, has gradually begun to be harvested. Merchants from all over the world are waving banknotes, traveling between Chinese ports and the northwest inland.

Alfalfa’s reputation as a high-quality forage grass has spread across the world, but the collection of payments for Alfalfa No. 1 seeds has not been smooth enough.

……

Beijing, China Agricultural Industry High-Quality Development Conference.

At the meeting.

Experts invited by the Ministry of Agriculture once again shared the development status of the four major international grain traders.

The various information is extremely detailed.

Even the development path and global layout were commented on and analyzed one by one.

When talking about the world's oldest international grain traders, Director Liu of the Ministry of Agriculture's Grain Production Department pointed the finger at the China National Grain and Foodstuff Group and Jiahe Group.

Director Liu said loudly: "China also needs such international grain traders, and domestic agricultural enterprises also need to make their voices heard in the world."

"Both are grain traders and both are Fortune 500 companies. Bunge Group has adopted a full industry chain strategy. Why can't China National Grain Group do the same?"

"There are also Jiahe Group and Monsanto, which also started out with seeds and can also expand upstream and downstream of the industrial chain!"

Facing Director Liu's question, Guo Yang just pretended to be stupid. Monsanto and Jiahe are different.

In addition to the best-selling corn and soybean seeds, herbicides are also an important source of revenue for Monsanto, and there is still some gap in the size of the two.

Guo Yang remained silent, but Yu Bo, president of the National Grain and Oils Corporation, had no choice but to ask about it. To some extent, the development plan of the National Grain and Oils Corporation was also responding to the decision of the top management.

Yu Bo said to the microphone on the table: "Director Liu, after Guoliang Group acquired a stake in Great Wall Wine in 1983, it has been transforming into a diversified enterprise.

It has gradually entered the fields of hotel management, metal packaging, real estate development, financial services, etc., and opened up the market for tomato sauce and ethanol by acquiring companies such as Xinjiang Tunhe and China Resources Alcohol.

According to the group's strategic plan, in the next three years we will consider promoting a full industry chain strategy from farm to table."

After saying that, Yu Bo stood up, nodded slightly to express his thanks, and glanced at the entire audience.

In addition to government departments, many leading agricultural and animal husbandry enterprises also attended the conference today, and Guoliang is undoubtedly one of the best.

The audience also gave applause at the right time.

Guo Yang was surrounded by a whisper, "I'm afraid that only the National Grain Group can handle the whole industry chain strategy."

The person sitting next to him is none other than Liu Yonghao, the chairman of New Hope Group, whose diversification strategy has been hindered but has become very popular recently.

Last year, New Hope Group quietly and swiftly completed the acquisition of Shandong Liuhe Group, the third largest feed company in the country, surpassing Charoen Pokphand Group in one fell swoop and becoming the leader in the domestic feed industry.

Guo Yang remained silent.

As both companies are in the livestock industry, Jiahe and New Hope will sooner or later become competitors.

They are wary of each other.

The person who arranged them to sit together must be a genius.

He is not optimistic about the development of the entire industrial chain of China National Grain and Oils Corporation, as the gap between China National Grain and Bunge is too big.

One can only deploy domestically, while the other can mobilize resources globally.

The entire industrial chain, as its name suggests, is just a relatively neat industrial layout.

The formation is not for looking good, but for fighting.

After the bankruptcy of Denong Group, Guoliang acquired Tunhe in Xinjiang Province. However, the originally profitable enterprise fell into losses for several consecutive years after it came into the hands of Guoliang.

This is evident from this.

Guo Yang remained silent, but others wanted him to express his opinions and spoke up one after another.

"Where's Jiahe?"

"Jiahe Group is really powerful this year. Tianhe Seeds, Alfalfa Agriculture and Animal Husbandry, and Hexi Dairy are all more powerful than the other."

"According to this trend, Jiahe will surpass New Hope Group this year!"

"New Hope Group's revenue last year was 20 billion yuan. It's still unclear who will win or lose. Both of them are likely to take the top spot in the domestic agricultural and animal husbandry industry."

The attention of the whole audience was focused on Guo Yang and Liu Yonghao.

Liu Yonghao pushed the microphone towards Guo Yang and made a gesture of invitation.

Guo Yang raised his eyebrows, but he didn't want to offend the Ministry of Agriculture, so he said, "Jiahe will also deepen its presence in the industrial chain."

A short sentence.

The whole audience was silent for a moment.

Director Liu asked, "That's it?"

Before attending the meeting, Guo Yang was mentally prepared, even though large companies such as New Hope Group and China National Grain and Oils Corporation have revenues of hundreds of billions.

But in terms of profit, Jiahe is dozens of blocks ahead of them, especially the China National Grain and Oils Corporation, a Fortune 500 company, most of whose industries are loss-making and whose annual profit is only a few hundred million.

Therefore, Golden Harvest needs to make more efforts.

He also knew what Director Liu wanted to hear.

Guo Yang said solemnly: “In the next one or two years, Jiahe will consider entering the grain processing fields such as soybeans, corn, and rice.

At the same time, we insist on vertical integration in advantageous areas and improve the layout of the entire industrial chain from planting-storage-trading-processing-sales. "

Liu Yonghao breathed a sigh of relief.

Jiahe has not directly stated that it will enter the feed industry.

The huge profits in the feed industry are over.

New Hope, Charoen Pokphand and Tongwei all rely on the advantages of industrialization and scale to make small profits.

If Jiahe enters the feed industry at this time, it will undoubtedly be extremely bad news for them.

Director Liu was also very satisfied with Guo Yang's statement and smiled rarely.

"The country will also launch a strategic plan for the soybean industry as soon as possible to save China's soybean industry!"

(End of this chapter)