Where is the pork, Netease?

(Ecns.cn) – In 2009, the Chinese Internet company Netease trumpeted that it would invest 10 million yuan (US$1.58 million) to set up a pig farm. Three years has passed and the public is questioning where these pigs are being bred currently.

The reason why this project stirs up so much interest has much to do with the status of pigs in the country, as pork is one of the most important foods for Chinese people and everyone hopes to buy products from pigs raised in a more healthy way.

According to varied statistics, in recent years an annual average of 97,000 tons of antibiotics has been used in livestock husbandry in China. In the hog market, the use of the banned anabolic steroid clenbuterol,is no longer fresh news.

In 2011, quite a few food safety scandals related to pork have rattled the nation, involving some big enterprises such as Shuanghui Group, China's largest food processor.

It was under these circumstances in March of last year that Netease announced the first phase of a 1,200-mu (80-hectare) pig farm was underway in Anji County of eastern China's Zhejiang Province, which excited the populace for a while; however, a report by China Youth Daily revealed the project is still in a phase of idle theorizing.

Pig breeding promises profits

When talking about the decision to improve hog raising, Ding Lei (William Ding), founder and current CEO of Netease, said the idea occurred to him when he was eating hotpot cuisine with some friends.

Ding admitted that he is a gourmet and very fussy and critical about food quality. While at the restaurant he felt there was something wrong with the coagulated pig blood they served based on its color and taste, so he demanded a replacement portion.

That was where the "Netease pigs" idea came from, and Ding hopes that people will no longer have to worry about such matters when they choose to eat their favorite pork dishes.

Concerning the purpose for setting up this pig farm, Ding said it was of course for profit, not charity as many expected.

Many people think it is not difficult to raise pigs, but the fact is one needs to be attentive from the very beginning, about everything from location to pig feed, breeding technology to manure disposal.

To ensure the health of the pigs, Ding noted Netease intends to follow the rules set for international biological epidemic prevention and segment the hog houses. Different colors represent various degrees of epidemic prevention – red represents an area infected with a serious virus, while green designates a safe area.

Risks in the hog market

At first, Netease was going to invest in agriculture, not particularly in pigs. Once committed to this plan, they began to visit different countries and make a detailed study of hog farms.

Ding said a large amount of foreign capital flew into the domestic pig breeding industry in 2007 and 2008, resulting in mad hikes to pork prices. To handle the situation, the government came up with a series of policies to curb the price pressure, including subsidies to pig breeders. It was reported that during those years one could earn 100 yuan (US$15.8) on a subsidized pig even before the sale , after all costs were taken into consideration.

However, since 2009, pork prices have continually and unexpectedly dropped with many investors suffering such great losses that some of them chose to retreat.

Ding explained the his watchword for raising pigs – quality, and warned it woudl be some time before Netease pork makes it to the nation's dinner tables.

Idle theorizing

Early this week, Chinese authorities in agriculture, quality inspection, commerce and public security said they will continue to enhance their joint monitoring protocols and surprise inspections of food markets as the traditional Spring Festival approaches. Rice, cooking oil, meat, egg, dairy products and frozen food are the targets, the State Council Food Safety Commission said in a circular on Thursday.

This reminded the public of the Netease pigs again, but Ding said they are still in prepatration, and obtaining firsthand information from advanced pig farms and pork processors around the world.

According to Ding, they have visited Japan, the US, Spain, Germany, the Netherlands, Denmark and many other countries that have well developed pig farm operations. The final framework of the project has been mapped out by the Netease team and the final choice of model will be made known to the public, and all background information leading up to the choice of one food safety technology over another will be disclosed, added Ding.

In December, the national average market price for a hog was 16.39 yuan/kg (US$2.6/kg) liveweight, while the average piglet price was 27.42 yuan/kg (US$4.3/kg) liveweight. Ding said Netease will select a proper time to kick off the project and seize the best opportunity presented by the market.