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 Name||Sustainable Dairy Farming and Milk Safety Project|
|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||
|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|
|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.
|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.
The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.
The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
|Title||Document Type||Document Date|
|Sustainable Dairy Farming and Milk Safety Project: Report and Recommendation of the President||Reports and Recommendations of the President||Jun 2016|
|Sustainable Dairy Farming and Milk Safety Project: Initial Poverty and Social Analysis||Initial Poverty and Social Analysis||May 2016|
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
None currently available.
None currently available.
The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.
Requests for information may also be directed to the InfoUnit.
People's Republic of China (PRC): Sustainable Dairy Farming and Milk SafetyADB will provide a $62.5 million yuan loan to Inner Mongolia Saikexing Breeding and Biotechnology Group (SKX) and will act as the lender of record for the participation of selected commercial banks of up to $62.5 million equivalent in yuan.
ADB Mobilizes Commercial Cofinancing to Support PRC's Dairy IndustryADB signed today agreements in Hohhot, Inner Mongolia, with leading commercial banks to support Saikexing to reduce environmental pollution, improve food safety, and expand the domestic supply of quality milk in the PRC.
ADB Private Sector Loan Promotes Higher Standards in PRC Dairy IndustryADB and Saikexing signed a $125 million loan to help reduce environmental pollution, improve food safety, and expand the domestic supply of quality milk in the People’s Republic of China.