Inner Mongolia has decided to transform itself into a green agricultural and animal products processing facility, creating a new opportunity for the local vegetable industry. President Xi Jinping expressed his hope in the region's transformation on the eve of the 2014 Spring Festival. The region has begun to upgrade its mutton industry this year to build its brand, expand its market, and raise industrial scale and level.
It's a month before mutton production starts at Xilin Gol League's Saihantala town in Sonid Right Banner on May 20.
The head of the local herdsman cooperative raised 800 Sonid sheep on 15,000 mu (1,000 hectares) of grassland. The head has led a total of 14 local households to wealth through two breeding models, one featuring company, cooperative and herdsmen and the other involving company and family-run pastures. The herdsmen signed sales contracts with meat companies the moment the sheep were born to ensure stable sales price, according to the head.
Last year, the Sonid mutton was priced at 52 yuan ($8.38) per kilogram, and family heads made more than 200,000 yuan for the 300 sheep they raised. The head moved the mutton harvest time to June 20 as a response to Sonid Right Banner’s call for effective and disaster-free animal husbandry development, which earned him an extra 13,000 yuan in subsidies. The early harvest can effectively protect pastures and ensure sustainable industrial development, according to the local government. Sonid Right Banner has given local herdsmen more than 30 million yuan in subsidies to encourage the early harvest.
The head said that he had used the increased income to add a sheep greenhouse, a solar and wind power generator, a freezer and a greenhouse electronic eye, which can monitor every corner of the greenhouse.
“Mutton industry development has not only increased local income but also effectively pushes for scale and scientific development of sheep breeding,” said an office director at the Sonid Right Banner’s industrialization office.
QR code ensures quality and safety
As one of the three major mutton facilities in China, Xilin Gol League has plentiful sheep from Ujimqin and Sonid. It is setting up whole-course and trace management for high-end and refined mutton development.
"We have our own sheep breeding facility in Xilin Gol League and built a mutton industrial association to form an industrial system featuring company, facility and herdsmen," said Meng Xiaodi, general office director at the company. At the moment, the company has integrated sheep breeding, slaughtering, processing and sales, which ensures the mutton quality, according to Meng.
The integral industry chain has ensured food safety. Last year, the company put an intelligent ear tag on each of the 40,000 sheep, costing the company more than 600,000 yuan. It will spend 4 million yuan to put the device on another 200,000 sheep this year. The ear tag can set up a health record for each sheep, and consumers can scan the QR code to get detailed information on the sheep’s age, weight, living conditions, test results, slaughter time and logistics, according to Liu Qingshan, the company’s production manager. “Consumers can check every link in mutton production, sales and processing,” Liu added.
Once quality and safety is ensured, products need to be promoted through a price strategy. Insiders all agreed that Xilin Gol’s mutton has to position itself well on the market. They should aim at high-end customers, standardize the whole technical process, and make a refined product design to make the best mutton nationwide.
Innovation model creates wealth
Every step of industrial development requires production organization and product processing technology innovation. At Mengyang Co’s Helin facility, every industrial link, including sheep breeding, slaughtering, processing and packaging, can be seen from a big monitoring wall. This allows the whole process to be controlled and tracked.
The facility has integrated scale ecological pasture construction, organic fodder processing, sheep breeding and organic meat product processing, forming an integral modern ecological industrial chain.
The company has introduced bank and bonding companies to form a sheep-based system that involves facilities, companies, herdsmen, banks and underwriters. The company will seek loans from financial partners and provide experienced cooperatives or herdsmen with good quality breeding sheep for free. The cooperative or herdsman who receives the breeding sheep should offer a three-month-old lamb to the company per year for three sucussivesuccessive years, then it can keep the breedingsheep.
Moreover, the company will offer specialized technicians and equipment as well as immunization service to help breed sheep. The business model has effectively solved the money problem of cooperatives and herdsman, reduced breeding risks and enabled herdsmen to make money with small start-up capital. In addition, the company has set up a red line price. When the market price is below the red line, the company will make purchases at the red line price to ensure its partner’s benefits.
The company introduced a cutting-edge slaughtering line from Australia, a severance unit from Germany and a vacuum package unit from the US. It applied a subcooling acid discharge process, integrated organic breeding, fine process and sales, and upgraded safety management to ensure mutton quality and safety.
Market calls for brand development
Inner Mongolia has several famous brands nationwide, such as Erdos, Yili and Mengniu, but it doesn’t have a household brand for mutton. Therefore, establishing a big mutton brand is pressing.
The fake mutton incident in 2013 greatly undermined the integrity of the national mutton industry and hurt profits of standup mutton companies. However, the incident brought an opportunity for Inner Mongolia to develop its pollution-free mutton. Under local government supervision, Inner Mongolia’s mutton industry has made great strides in eliminating substandard enterprises, and realizing standardized and scale development. Local mutton companies have become more disciplined and have taken the initiative to upgrade industrial operations, boosting the healthy and sustainable development of the whole mutton industry in the region.
“The fake mutton incident cut off counterfeit products in mutton industry development and helped ensure healthy development of the whole industry,” said Guo Xiaodong, president of Xilin Gol League Zhengli Live Stock Products Co. Inner Mongolia’s mutton industry has made the best use of the circumstances to set up its image, which has driven the whole mutton industry, according to Guo.
Yan Shuchun, president of Mengyang said that brand development is the only way for a company to get stronger. Mengyang recently finished a five-year brand development strategy plan and will take steps to build itself into a top brand in China’s mutton industry.
The 2014 World Meat Congress will be held by the International Meat Secretariat at the Beijing International Convention Center from June 14-16, with Mengyang attending. It will deliver a speech on behalf of the Chinese mutton companies, marking the first step forward in the company’s brand expansion, which is significant for Inner Mongolia’s mutton brand development.
Foster leading companies
At the moment, Inner Mongolia’s mutton output stands at 800,000 tons, with 80 million sheep on hand. It has three sheep breeding belts that are populated by Hulunbeir, Ujimqin, Sonid and Bamei sheep, paving the way for pollution-free mutton development.
Inner Mongolia’s farming and animal husbandry department came up with a guidance on nurturing leading mutton companies to promote industrial cluster development and upgrading farming and animal husbandry industrialized operations in April. It called for fine processing and sales, brand establishment, and market and industrial scale expansion.
Jia Jinmei, deputy director of the industrialization office at the husbandry department, said that Inner Mongolia will build a mutton industrial park and regroup mutton processing companies, such as Mengyang, Xiaoweiyang and Mengdu Sheep, to set up large business groups and build a famous brand. The region will establish trace management that integrates breeding, processing, circulation and sales. It will also allow the leading mutton company to work with other industrial players, specialized sheep breeding cooperatives or households to form a large-scale mutton combo. It will push ahead processing company regrouping and mutton park construction to create its own distinctive mutton brand.
Inner Mongolia will also issue favorable policies to boost mutton industry development. “The government should take steps to increase financial and policy support to build the mutton industry into the third calling card for the region, right after the dairy and wool industries,” said Jia Jinmei.