Information of VV Group
VV: Launch “Big Grain” Strategy to Build Integrated Grain Industry Chain
 2016-06-20  [] [] []

 The classic advertising slogan “VV Soy Milk, Happy Life” which has been popular since a dozen years ago has made VV Group a household name. Yet, it is little known that VV did not produce soy milk at the very beginning. In fact, it was a rice processing plant with assets worth less than one million yuan. Today, VV has found itself back to the “big grain” strategy. So far, the company has established grain production and warehousing bases in many regions such as Jiangsu, Henan and Heilongjiang. In addition, VV has, in conjunction with Chinatex and Kunlun, set up the bulk agricultural products spot trading platform.

VV, which has made considerable investment in the grain industry, is fulfilling its strategic objective of “big agriculture, big grain, big food”, planning to build a comprehensive grain industry park combining storage, processing, and trade. Under the guidance of the strategy, VV has set foot in the sectors such as milk beverage, liquor, grain & oil, and tea in recent years. Besides soy milk, the consumer products that it has put on the market have made VV an enterprise with several brands and crossing different food varieties and featuring grain industry integration.

 
Establishing grain production and warehousing bases in an extensive manner

Founded in 1999, VV was not a soy milk producer at the very beginning. It was a rice processing plant with assets worth less than one million yuan affiliated to the County Grain Bureau of Tongshan, Xuzhou, Jiangsu. Later, it was developed through system transformation into a large agricultural enterprise on this basis.

As an enterprise starting with grain processing, VV, through development, has vigorously promoted the cooperation mode of “company + major planters” in recent years, expanding the supply channel of the main processing raw materials such as Soybeans, sorghum, wheat, rice, and grains. The company has established the Huanghuaihai High-quality Wheat Base with Xuzhou in Jiangsu province as the center, Henan Zhengyang Small Groundnut Base, Heilongjiang Suihua Northeast China Soybean Base, Xiaoxing'anling Tangwang River Ecological Rice Base, and Guizhou Xingyi Ecological Wine Base. At the same time, taking advantage of the “One Belt, One Road” initiative, VV has begun to establish its international presence. So far, it has established oat bases, sugar bases and milk bases in Australia, New Zealand, Brazil and Belarus, and is carrying out cooperation with international major grain merchants.

Near these domestic grain production bases, VV has also established its grain warehousing bases along with COFCO, SINOGRAIN, Chinatex and other central enterprises. These grain warehousing bases can store hundreds of thousands of tons of grain. Among them, the storage capacity of wheat of Xuzhou, the headquarters of VV and the central city of the Huanghuaihai Economic Zone, has reached 600,000 tons. Henan Zhengyang’s storage capacity of oil peanut has reached 200,000 tons. Heilongjiang Suihua’s soybean warehouse can store 500,000 tons of soybeans. Jiamusi’s rice reserves warehouse can hold 300,000 tons of rice.

The grain warehousing base, located in Zhangji Town, Tongshan District, Xuzhou, and covering an area of 255 acres, has 15 standard warehouses. Each has an area of 4800 square meters. In early January 2016, VV Grain and Oil Warehousing Logistics Park located in Yellow River, Haihe and Huaihe Economic Zone, was officially put into operation. Phase I can store 320,000 tons of grain.

According to our knowledge, VV Group, owner of the four major grain warehousing centers, has so far developed a modern warehousing capacity of more than 1.6 million tons of grains. During the 13th Five-Year Plan period, VV Group will continue to make investment in construction. By that time, its warehousing capacity will exceed 2 million tons.

Establish the grain spot trading platform

In addition to building grain production and warehousing bases, VV has also set up an international bulk agricultural products spot trading platform along with Chinatex and Kunlun a part of the fulfillment of its “big grain” strategy.

The platform has a registered capital of 200 million yuan, among which, VV occupied 30% of the total contribution. Through estimation, during the normal operation of the project, the annual market trading scale and real delivery scale of the platform will reach 30 million tons, and the annual trading volume will exceed 150 billion yuan, with some 5000 member units. In addition, the annual sales income will hit 2 billion yuan and the pre-tax profit 500 million yuan.

At the beginning of the establishment of the center, the trading varieties mainly include soybean and palm oil. According to the plan, the center will also engage in spot trading of agricultural products with advantages such as grain and oil, aquatic products, bio-energy in Jiangsu and Zhejiang provinces and their surrounding areas. In the future, if conditions permit, the center will, in conjunction with foreign agricultural products trading exchanges, set up the overseas delivery and domestic spot delivery and warehouses, making it an influential agricultural products trading exchange in China’s grain and oil industry.

Why has VV invested heavily in establishing grain production bases and warehousing bases and even a grain spot trading platform? The answer can be found in its Annual Report 2015, which reveals that VV has set “big agriculture, big grain, big food" as its strategic objective. Moreover, the company has planned to become a comprehensive grain industrial park combining collection & storage, processing, and trade.

The purpose of production and storage is to facilitate the processing of products. Besides establishing the production and warehousing bases for various grains, VV has also introduced different types of food products. In addition to the well-known VV soy milk, VV has also set foot in the milk, grain and oil, liquor, tea and other sectors in recent years. So far, it has owned several brands covering different types of food. These food products include casual nutritious food VV SOYJOY, grain beverages of VV Gudong series, vegetable protein beverages, functional soybean peptide beverages, nutritious coffee, Tianshan Snow series milk. Guizhouchun Liquor, Zhijiang Liquor, Chuangwang Liquor, Mingjiufang Liquor, and black tea of Anhua, Hunan Anhua in Yueqingyuan series.

So far, VV Group has owned several brands such as VV, Tianshan Snow, Zhijiang, Guizhouchun, Tangwanghe, Liuchaosong, and Yiqingyuan. With these brands, its grain and food industry chain has been extended and a complete vertically integrated industry chain built.

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