KKR Pays $100 Million for Stake in China Aquatic Feed Producer

  • KKR buys stake in fifth investment in China food industry
  • Yuehai Feed Co. growing at least 20 percent annually

KKR & Co. has paid about $100 million to purchase a “significant minority stake" in Yuehai Feed Group Co., a Chinese maker of aquatic feed, KKR’s regional China head Julian Wolhardt said in an interview.

Yuehai, based in Guangdong, mainly produces feed for shrimp and seawater fish, according to a joint statement. The KKR investment will help the company boost output and expand into other types of fish feeds, Wolhardt said.

Yuehai has been growing by at least 20 percent annually as it benefits from rising domestic demand for fish and seafood, Wolhardt said.

Fish and seafood consumption in China is rising faster than other sources of animal protein as a result of rising incomes and greater attention to health issues, according to the Food and Agriculture Organization. Even so, China’s annual per-capita consumption of aquatic food is 35 kilograms (77 pounds), well below Japan and South Korea where yearly consumption exceeds 50 kilograms per head, the statement said.

China is implementing stricter rules on fish and seafood production in order to enhance food safety and improve environmental standards. New laws restrict the use of raw fish in aquatic feed and clamp down on the use of antibiotics, according to the companies’ statement.

The Yuehai purchase is KKR’s fifth investment in a Chinese company involved in improving the country’s food safety and security, Wolhardt said. Previous food-related investments include China Modern Dairy Holdings Ltd., Cofco Meat Investment Co., and Fujian Sunner Development Co., China’s largest chicken breeder and processor.

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