Zhang Jianhua, owner of a hog farm in Qiongjie county, Shannan, Tibet autonomous region, vaccinates a piglet on April 21, 2020. Photo:Xinhua

German chemical giant BASF announced Monday it will invest in Chinese start-up SmartAHC, a supplier of digitalization solutions for hog farming. It is BASF's first investment in an agricultural start-up in China.

According to BASF, the Shanghai-based startup SmartAHC provides customized digital solutions to increase efficiency throughout the pork value chain, thus husbandry operations can optimize labor productivity in the production process.

"With this investment, we want to increase our R&D capacities and further expand our market presence," said Lan Song, SmartAHC's CEO.

A spokesperson for BASF said that BASF is very optimistic for the long-term development of the livestock industry in China.

"China's livestock industry has a lot of room to grow and it is already the world's largest pig market. Although floods, COVID-19 and other factors will affect the husbandry industry, China's central and local governments have introduced a lot of policies to benefit farmers. BASF is confident in pig breeding in China," the spokesperson told the Global Times Tuesday.

A total of 4.55 billion yuan ($650.7 million) of the central budget will be released to support the breeding industry, especially the pig industry, according to National Development and Reform Commission on Friday.

China is currently the biggest pig breeding and pork consumption market in the world. Global annual demand for pork is about 1.4 billion heads, about half of which comes from China. In 2018, Chinese operations produced around 700 million animals, and two-thirds of the meat consumed in the country comes from pigs. 

BASF's main businesses include nutrition and care and agricultural solutions, making it a material supplier in the breeding industry, such as animal feed, animal nutrition additives, floor materials and thermal materials for breeding plant, per a report sent to the Global Times from BASF.

According to the financial reports of BASF in the second quarter of 2020, earnings in the agricultural solutions segment were at the level of the prior-year quarter.

In addition to investment in breeding industry, the spokesperson said that the BASF smart Verbund in Zhanjiang, South China's Guangdong Province is under normal construction and phase I will be completed as scheduled in 2022.