Veterinary groups Ceva Santé Animale of France, and Sichuan Hengtong Animal Pharmacy Co. of China signed an international partnership agreement to create Ceva Hengtong. The partnership will offer pharmaceutical products and services to poultry and swine producers in China.
According to the Earth Policy Institute, China consumes more than a quarter of all meat produced worldwide. The demand for meat is estimated to grow as China's population and living standards increase. Ceva Hengtong was created, in part, to meet this demand.
Faced with a livestock market which remains highly fragmented in China (60 percent of farmers have fewer than 50 head of sows), Ceva Hengtong will focus on the poultry and swine segments, providing businesses with the services they need in order to improve efficiency.
Ceva Santé Animale will own 55 percent of the shares in Ceva Hengtong and Sichuan Hengtong Animal Pharmacy will own 45 percent. Liang Guo, current CEO and the largest shareholder of Sichuan Hengtong Animal Pharmacy, will be appointed managing director of the joint venture. The company will continue to be based in Neijiang but relocate to a new, purpose-built facility in Sichuan, meeting all international quality standards by 2015. Ceva Santé Animale will import certain products made in France.
Sichuan Hengtong Animal Pharmacy Co., having experienced significant growth in Sichuan, decided to seek out a partner capable of strengthening industrial and technical support. Meanwhile, Ceva Santé Animale looked for a way to expand its veterinary sector in China after forming partnerships with South China Agricultural University and Jinyu Baoling.
Marc Prikazsky, chairman and CEO of Ceva Santé Animale, said, "Together is an important word in Ceva's vision, 'Together, Beyond Animal Health.' There can be no bigger challenge than feeding China's rapidly growing urban population; that's why we had to find the right partner locally to help us reach out to country's livestock producers. I have immense confidence in Mr. Guo and his team of 240 people. Together we will be stronger and together we will help bring high-quality animal protein (pork and poultry) to the Chinese people."
Investment banking firm E.J. McKay acted as financial advisor for Ceva Santé Animale. CEO James Li said, "We are very pleased to have advised and represented Ceva in this transaction. It will not only strengthen Ceva's market-leading position worldwide, but also create a positive impact on the veterinary health industry and food security in China. This transaction also demonstrates E.J. McKay's leadership in the pharmaceutical sector and our commitment to the France-China investment corridor."