Mr. Han Zhenfa and the Zhengye Group (ZG) are the project sponsors. In 1992, after having served nearly twenty years in provincial and national government, Mr. Han launched a successful business career. His business activities center on real-estate development in Changchun (capital of Jilin Province) and Beijing and, more recently, on pig farming and pork meat processing. Mr. Han owns ZG, which, in turn, holds 86.5% of Jilin Huazheng Agribusiness Development Co. Ltd. (ADC), the project company.

The estimated total project cost is $104.6 million, including working capital. The venture is being implemented in several phases of which the first stage is near completion and has been financed with shareholder funds. The proposed IFC investment is a $22 million loan, of which a $15 million A loan is for IFC’s own account and a $7 million B loan will be syndicated.

15.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	15.0
Equity

* These investment figures are indicative

Project sites are spread throughout the countryside of Jilin Province, in northeastern China (considered to be the “grain belt” of China). The Project is expected to consist of two slaughterhouses, located in GongZhuLing City (existing) and Changchun, respectively. The existing pig farm is in Yinfeng county, Heilinzi Town. Seven of the breeding farms will be located in the vicinity of GongZhuLing City. There will be one pig farm each in Qucaihe town, Panshi county; Shiyan forest center, Shuangliao city; Quanyanling town, Lishu county; and Caoyuan station, Nong’an county, raising the total number of breeding farms to 11. ZG also operates a feed mill.

This is a Category B project according to IFC’s environmental review procedure.

Slaughterhouse. In 2000, ADC’s slaughterhouse in GongZhuLing City was awarded ISO 9001 certification. Air emissions and fire protection measures meet IFC guidelines. Some minor upgrades are needed to bring the wastewater treatment plant up to IFC guidelines, and ADC will implement these upgrades. ADC expects to acquire a second slaughterhouse most likely in Changchun in 2003, at which time due diligence will be carried out. Any environmental and health and safety upgrades required in order for that facility to meet IFC guidelines will be specified in the investment documents

Breeding Farms. ADC currently operates one breeding stock farm (PS Farm) and intends to develop a total of 11 breeding farms, with up to 1,000 sows per farm. These farms will be developed in rural areas to meet the highest standards for biosecurity. The coal-fired boiler at the existing breeding stock farm unit meets Chinese emissions standards but exceeds the IFC guideline for particulates emissions. The boiler will be upgraded with improved combustion controls and pollution control equipment to meet IFC guidelines. Wastewater is already subject to basic conventional treatment but will need further improvement to meet IFC guidelines. The company will ensure that wastewater treatment facilities are upgraded on this farm and on future farms as they are developed. Manure is sold to local farmers for use as fertilizer. Manure is in high demand, and there is minimal accumulation on site. No significant odor is produced by the facility or is expected due to the excellent sanitary conditions maintained on the farm (s). Access to the farms is strictly controlled. Workers wear protective uniforms. Vaccines, antibiotics and other pharmaceutical products are carefully controlled. The site has adequate fire safety provisions. The company will also ensure that fire safety is fully addressed in living and working quarters in the new farms to be developed.

Feed mill. The feed mill has appropriate dust control measures and health and safety protection, and raises no significant environmental and social issues.

Village Pig Farms. Young pigs from the parent stock farms are sold to village farmers who independently rear them to market size in enclosed, biosecure pens in batches of about 100 pigs. Typical units are enclosed, single-storey sheds, heated in winter, with adequate room for the animals. Floors are washed down several times per day. Liquid and solid wastes are collected and applied directly to the farmers’ fields. Waste management is handled in an appropriate fashion. The growing units examined at appraisal were located in villages, but some villages are considering consolidating all pig production units in a convenient area outside of the village where the wastes can be handled jointly. ADC will provide advisory services to village farmers to optimize animal health and to transfer new procedures and technology to the farms.

Environmental Management. The company has developed policies to ensure that its operations are carried out to protect the environment and will be encouraged to formalize their procedures and monitoring in an environmental management system. Jilin Province is developing programs to ensure the sustainability of its agricultural base. ADC’s investments will further advance these initiatives.
Location of environmental documents in locally affected community
Municipal Government Office, GongZhuLing City, Jilin Province, Peoples Republic of China