Jiuding Capital has invested 90 million yuan in Heilongjiang Binsi Beef Industry Co., Ltd., a leading beef processing company in China.

Target Information

Heilongjiang Binsi Beef Industry Co., Ltd. (hereinafter referred to as 'Binsi Beef'), established in June 2005, has evolved into a comprehensive agricultural processing enterprise. The company specializes in the production, slaughtering, and processing of beef, as well as frozen food processing such as sweet corn. Binsi Beef is the largest livestock slaughtering and processing enterprise in Heilongjiang Province, and in 2009, it was elevated from a domestic beef supplier for McDonald's to a global supplier, ranking among the 47 meat suppliers for the fast-food giant and currently accounting for 70% of McDonald's raw beef procurement.
In 2011, Binsi Beef achieved a record processing volume of 100,000 beef cattle and earned $20 million in exports, making it the top in both industry processing and export volume. Its supply contract with McDonald's exceeded 200 million yuan, underlining its pivotal role in supplying quality beef to global markets.

Industry Overview in China

China's agricultural industry has seen significant investments in recent years, particularly in the agricultural sector. According to data from the Qianhai Capital Research Center, from 2006 to the first half of 2011, there have been 114 disclosed investment cases in agriculture, with 104 cases revealing a total investment amount of $1.76 billion. Notably, 2010 marked a record year with 47 disclosed investment cases amounting to $891 million, which was over half of the total historical investments up to that point. The investment momentum continued in 2011, indicating a vibrant and growing agricultural investment landscape in China.
Prominent venture capital and private equity firms, including Sequoia Capital, Qingle Capital, and Jiuding Capital, have been actively involved in agricultural investments, signifying a gold rush in the sector. This highlights the growing confidence and opportunities within China's agricultural industry, fueled by increasing domestic demand and export potential.
Furthermore, various segments within agriculture, such as machinery, pesticides, aquaculture, and crop planting, have attracted significant interest from investors, fostering innovation and development in the sector. This rising interest underscores the potential for growth and profitability for agricultural companies, such as Binsi Beef, which operate at the nexus of production and processing.

Rationale Behind the Deal

Jiuding Capital's investment of 90 million yuan in Binsi Beef reflects a strategic move to capitalize on the flourishing agricultural market in China. By investing in a leading meat processing company with established relationships with major clients like McDonald's, Jiuding s