China, People's Republic of: Sustainable Dairy Farming and Milk Safety Project

Nonsovereign Project | 49322-001

The project will support the $160 million investment plan of Inner Mongolia Saikexing Breeding and Biotechnology Group (SKX), the fourth largest dairy farming company in the People's Republic of China (PRC), over the 2017 -2018 period, including: (i) environmental capex, (ii) food safety capex, and (iii) modern dairy farm expansion capex. As such, the project will promote modern dairy farming with better environmental sustainability and product safety.

Project Details

  • Project Officer
    Hoshi, Hayato
    Private Sector Operations Department
    Request for information
  • Country
    China, People's Republic of
  • Sector
    • Agriculture, natural resources and rural development
Project Name Sustainable Dairy Farming and Milk Safety Project
Project Number 49322-001
Borrower/Company Inner Mongolia Saikexing Breeding and Biotechnology Group
Country China, People's Republic of
Location Hebei, Heilongjiang, Henan, Inner Mongolia, Ningsia Hui Autonomous Region, Shanxi
Type or Modality of Assistance
3406 Loan Ordinary capital resources CNY 406.99 million Closed
78 B-Loan Other CNY 406.99 million Closed
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Partnerships
Private sector development
Sector / Subsector

Agriculture, natural resources and rural development / Livestock
Gender Equity and Mainstreaming Some gender elements
Responsible ADB Department Private Sector Operations Department
Responsible ADB Division Portfolio Management Division, PSOD
Responsible ADB Officer Hoshi, Hayato
Project Sponsor(s)
Description The project will support the $160 million investment plan of Inner Mongolia Saikexing Breeding and Biotechnology Group (SKX), the fourth largest dairy farming company in the People's Republic of China (PRC), over the 2017 -2018 period, including: (i) environmental capex, (ii) food safety capex, and (iii) modern dairy farm expansion capex. As such, the project will promote modern dairy farming with better environmental sustainability and product safety.
Objectives and Scope The project will promote modern dairy farming with better environmental sustainability and product safety. The project is consistent with the 2015 strategic orientations for the agriculture sector provided by the Central Committee of the Communist Party of China and the PRC government as a contribution to the country's Thirteenth Five-Year Plan (2016-2020), which set policy objectives for the sector, including (i) enhancing environmental protection and waste treatment in agricultural production; (ii) improving the quality of agricultural products and the level of food safety; and (iii) optimizing the structure of the agricultural industry by supporting production in certain sectors, such as the livestock sector.
Status of Operation/Construction ADB's $62.5 million A-loan was signed on 18 August 2016 and was disbursed in two tranches (November 2016 and December 2016), each in the amount of CNY207.9 million ($31.25 million equivalent) to fund capex of five farms. The $41.0 million Complementary Loan (participated by Korea Development Bank and Fubon Bank (China) Co. Ltd.) was facilitated in two Tranches, with a C1 Tranche of CNY245.0 million ($36.7 million equivalent) signed on 18 April 2017 and disbursed in May 2017, and a C2 Tranche of CNY30.0 million ($4.3 million equivalent) signed on 30 April 2019 and disbursed in May 2019, together to further fund capex of four new farms.
Linkage to Country/Regional Strategy

The project is consistent with ADB's country partnership strategy, 2016 to 2020 for the PRC. To support rural development for inclusive economic growth, ADB will assist the PRC in developing suitable methods to (i) modernize agriculture; (ii) promote circular agriculture through the value chain to reduce resource inputs and waste outputs, and control pollution; and (iii) improve food safety, including related infrastructure and capacity development. Through its private sector operations, ADB will support agribusiness projects that enhance productivity, inclusion of smallholder farmers in value chains, and food safety.

The project is also fully aligned with ADB's Operational Plan for Agriculture and Natural Resources, which recommends greater private sector agribusiness investments by ADB to contribute to public goods, such as food security, food safety, and reduced soil and water pollution, thus benefiting the wider developing member country populations.
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects The potential environmental and social impacts of the project have been identified, and effective measures to avoid, minimize, mitigate, and compensate for adverse impacts are incorporated in the safeguard reports and plans. Siting of the dairy farms is done in coordination with the local government to ensure that it conforms with local land use plans and avoids legally protected areas. Potential risks and impacts during construction are mostly site-specific and short-term, and can be effectively managed by good engineering construction and housekeeping practices implemented through a construction environmental management plan. During operation, the new waste management facilities will contribute to address concerns on solid waste and wastewater disposal, which has the potential for surface and groundwater pollution. Since the farms will be located away from inhabited areas, nuisance, noise, and odor impacts will be mitigated.
Involuntary Resettlement No involuntary resettlement impacts are envisaged because SKX will avoid forest and basic farmland and will lease state-owned land or unused and wasteland from land owners and villages on a willing-lessor and a willing-lessee basis. Future expansion activities are expected to be carried out in the northern part of the PRC, which has sufficient land resources. In unavoidable cases where basic farmland will be used, village collectives typically provide replacement land to these villagers to minimize impacts on their livelihoods.
Indigenous Peoples Impacts on indigenous peoples are unlikely, and SKX's operations are not expected to have impacts on identity, culture, and natural resource-based livelihoods. In ethnic minority autonomous regions where SKX operates, SKX will avoid leasing land used by ethnic minority groups. The company will offer jobs to willing and qualified workers, including those from ethnic minorities, who will benefit from the additional income and new livestock breeding skills and information.
Stakeholder Communication, Participation, and Consultation
Timetable for assistance design, processing and implementation
Concept Clearance 21 Sep 2015
Credit Committee Meeting 16 May 2016
Approval 29 Jun 2016
Last PDS Update 17 Mar 2021

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

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Related Publications

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