Leng Youbin: Establish The Safety Guarantee System Of Dairy Supply Chain And Realize The Comprehensive Revitalization Of China'S Dairy Industry

To promote high-quality development in the "14th five year plan", we must establish an effective system to expand domestic demand, speed up the cultivation of a complete domestic demand system, strengthen demand side management, and build a strong domestic market. The state attaches great importance to infant formula milk powder, so that the milk bottle of Chinese people can be firmly held in their own hands. The development of domestic infant powder industry is also included in the overall national development strategy.

By the end of September 2020, China's Feihe infant formula (Online + offline) market share reached 17.2%, becoming the first milk powder brand in China.

At present, under the background that the growth rate of domestic milk powder brand market is higher than that of foreign brands, how to realize the localization substitution of key core technologies and break through the current situation of high dependence on milk source import and high-quality forage and feed in dairy industry? How to firmly grasp the initiative of the development of China's dairy industry and realize the comprehensive revitalization of China's dairy industry?

The reporter of Nanfang finance and economics all media group talked with Leng Youbin, deputy chairman of the National People's Congress, vice president of China civil Chamber of Commerce and chairman of China Feihe, focusing on the topic of establishing a supply chain security system for the dairy industry.

Promote the establishment of dairy industry supply chain security system

Nanfang finance and Economics: what kind of practical experience is your proposal to focus on "establishing a supply chain security system for dairy industry" in the NPC and CPPCC this year?

Leng Youbin: I have been engaged in the dairy industry for more than 30 years. I know that the dairy industry straddles the primary, secondary and tertiary industries, covering forage planting, feed processing, dairy farming and dairy products processing, terminal sales and other links. It has a large span, a long chain and a higher degree of integration, which is related to the national economy and people's livelihood. Therefore, the safety of industrial chain and supply chain of dairy industry is particularly important.

At present, there are some challenges in the international industrial chain and supply chain security of dairy industry, and the self-sufficiency rate of some raw materials needs to be further improved.

I suggest that the dairy industry supply chain security system should be established as soon as possible.

First, further strengthen policy guidance, encourage dairy enterprises to actively carry out industrial innovation, support qualified dairy enterprises to build large-scale pastures, enter the upstream of the industrial chain, and optimize the industrial structure;

Second, improve the self-sufficiency rate of milk source, speed up the breeding of high-quality forage, improve the yield of dairy cows, and reduce the production cost of milk through the innovation of breeding mode and technology;

Thirdly, we should support dairy enterprises, universities and scientific research institutes to carry out technological breakthroughs in deep processing of milk ingredients as soon as possible, and encourage dairy enterprises to actively carry out industrial transformation;

Fourth, we should explore and establish a reserve mechanism for core raw materials, form a reserve capacity for some key raw materials that are "stuck in the neck", and effectively improve the ability to cope with risks such as "supply interruption".

Nanfang finance and Economics: you suggest supporting qualified dairy enterprises to build large-scale farms. What are the achievements of China flying crane in terms of its own ranches and exclusive farms?

Leng Youbin: Feihe is the first enterprise in China to build pasture and related industrial chain. In terms of its own pasture, the flying crane improved the breeding, breeding management and breeding technology of improved dairy cattle. Through fine management, the quality of fresh milk exceeded the European Union standard in milk fat, milk protein and colony index.

In terms of exclusive Farm: Feihe has established a special pasture planting base, adopting green, organic, large-scale and modern planting mode to ensure forage safety and reduce costs. At the same time, the flying crane also carries on the deep processing to the high quality feed. At present, flying crane has 300000 mu of exclusive farm, which is used to plant forage crops such as corn, alfalfa, oats, etc., to provide high-quality rations for dairy cows in its own pasture, and ensure the quality and safety of milk source control at the source.

In cooperation with the dairy innovation team of Chinese Academy of Agricultural Sciences, Feihe has opened up a number of experimental fields in the exclusive farm, carried out forage selection and breeding work, developed and tested nearly 100 varieties, and selected nearly 10 varieties for field observation. It mainly changes the problems of low nutritional index of domestic forage and single forage of domestic large-scale pasture.

Nanfang finance and Economics: in view of the government's work report this year that "using market-oriented mechanism to stimulate enterprise innovation and strengthen the dominant position of enterprise innovation", what work will China flying crane focus on in R & D this year?

Leng Youbin: this year's government work report has given great support to enterprises' innovation with great efforts and specific measures. We are very encouraged.

The research and development work of Feihe mainly focuses on two aspects: one is to strengthen the scientific and technological guidance, and strengthen the basic research on breast milk and early childhood nutrition in China. The second is to strengthen technical research, and make efforts in soil improvement, cattle breeding and breeding of high-quality forage.

At present, Harbin intelligent industrial park is under construction, including an annual output of 70000 tons of infant milk powder factory, functional raw material production line, intelligent logistics center, global leading R & D center and innovation testing center. After the completion of the project, from the perspective of functional raw materials, it will help to solve the dependence on imported functional raw materials, promote enterprises and industries to better participate in international competition, and grasp the development initiative.

The project is expected to be put into trial at the end of this year and put into production next year. It will become the largest comprehensive industrial base of infant milk powder industry in China.

Southern finance and Economics: according to the government work report, during the "14th five year plan" period, we should implement the national strategy of actively coping with population aging, improve the population service system with the focus on "one old and one small", promote the realization of appropriate fertility level, and gradually delay the legal retirement age. What opportunities and challenges do you think this will bring to the infant formula industry?

Leng Youbin: one old and one small is the happiness of people's livelihood, which is related to the potential of economic development. As far as infant powder industry is concerned, it is a good opportunity to have strong national policy support, and the market demand will continue to be better in the future. More and more consumers will favor the head brands in the milk powder industry. The head brands are more perfect in terms of product quality, credibility and service. Feihe also emphasizes "from selling products to selling value".

Flying crane is concerned about the nutritional and health needs of human life cycle, serving people from infants to the elderly. In the future, we will strengthen basic research, pay attention to the nutrition needs of children, adults, the elderly and people of all ages, so as to provide more accurate nutrition supply for a wider range of people.

Flying crane's "long term doctrine"

Nanfang finance and Economics: in 2019, China Feihe achieved revenue of 13.722 billion yuan (RMB), with a year-on-year growth of 32.0%; net profit of 3.935 billion yuan, a year-on-year increase of 75.5%; in the first half of 2020, the revenue was 8.707 billion yuan, with a year-on-year growth of 48%. What is the company's performance in 2020? Do you want to continue high-end product layout?

Leng Youbin: in 2020, we still maintain a steady growth, and the relevant performance information company will announce in the near future.

Flying crane has been adhering to the principle of providing high-quality products for consumers. From the aspects of industrial layout, innovation and research and development, it has always focused on the fitness of Chinese babies. Our star single product, xingfeifan, was fully upgraded in May last year. The new generation of patent OPO, sn-2 palmitic acid and GOS prebiotics are the three dominant combinations, which make xingfeifan closer to breast milk and bring better product experience to consumers. This year, we will continue to increase investment in scientific research and service experience of organic products.

Nanfang finance and Economics: according to the official website data, by the end of September 2020, the market share of Feihe infant formula milk powder (Online + offline) reached 17.2%, becoming the first milk powder brand in China. How can the company further expand its market share?

Leng Youbin: all our actions always focus on consumers and provide them with high-quality products and higher value services. All of these have been achieved. The increase of market share is a natural result.

A good product is a market pass, and R & D is the core of supporting product quality. Feihe has the first dairy academician workstation in China. We have built a production university research platform with Peking University Medical University, Jiangnan University and Northeast Agricultural University, and jointly established the whole industry chain innovation center with the dairy industry innovation team of Chinese Academy of Agricultural Sciences. From 16 to 19 years, our R & D investment increased by more than 12 times, and the R & D personnel expanded by 3 times. All of these ensure our R & D output. In addition, we also pay attention to the upgrading of consumer service experience, online and offline linkage, and provide more nurturing knowledge and services for consumers.

Nanfang finance and Economics: six years after the privatization of us shares, China flying crane successfully listed on the Hong Kong Stock Exchange on November 13, 2019, becoming the largest dairy enterprise with the largest initial market value in the history of the Hong Kong stock exchange. How can the company make use of the capital market to develop and grow?

Leng Youbin: Feihe was listed in the United States. After the baptism of the capital market, it returned to Hong Kong stock market in 2019. In fact, after listing, I didn't pay much attention to the market value. If there was no business foundation, no matter how high the market value would be, it would be a flash in the pan. I also said to the team that consumers have great trust in us by choosing us with their real gold and silver. What we need to do is to do a good job in products and services. The capital market has their judgment. In the final analysis, it is the sustainability of the enterprise. Feihe has always adhered to the long-term principle.

(for the capital market) is not to rely on the strength of development, it is in such an open and transparent environment, flying crane is confident to accept the supervision of the public.

Nanfang finance and Economics: how to look at the future development of infant formula milk powder industry?

Leng Youbin: if I use one word to evaluate the development of China's dairy industry, it is "confidence". Today, the confidence index of Chinese consumers on domestic milk powder has increased significantly, and domestic milk powder is increasingly recognized by Chinese mothers. The main reason is that China's infant milk powder industry is rooted in the local fresh milk source of product power, more suitable for China's baby physique innovation, and multi-channel service to create competitive advantages. In the future, we are confident that we will continue to take science and technology as the lead, make great efforts in key areas, strengthen independent innovation, and hold the Chinese baby's bottle in the hands of the Chinese people. Zhu Yiyi, the report group of Nanfang finance and economics all media group, reports from Beijing