In Depth: How a Failed Pig Farm Investment Ruined an Agri-Tech Giant

1. The Quzhou Yihai Agricultural Development Co. Ltd. facility in Zhejiang, China, which was intended to be the province's largest pig farm with a designed capacity of over 10,000 sows and 240,000 piglets annually, has been idle since its completion in July 2021. Instead of serving as a hub for agricultural operations, the site stands abandoned with overgrown weeds and vacant buildings, reflecting a broader corporate and agricultural crisis.[para. 1]

2. The inactivity at Quzhou Yihai is a symptom of a broader dispute that has affected Tech-Bank Food Co. Ltd., a Shenzhen-listed agritech firm. This conflict caused Tech-Bank’s shares to plummet sharply and highlighted the vulnerability of China’s pork industry in the wake of disease outbreaks, supply chain disruptions, and aggressive government interventions meant to stabilize pork supplies after the African swine fever crisis.[para. 2]

3. On January 31, Tech-Bank delivered a bleak financial forecast stating an expected net loss of between 1.11 billion yuan and 1.31 billion yuan in 2025, a reversal from the 1.46 billion yuan profit posted in 2024. The company cited a “perfect storm” of financial pressures: 350 million yuan in interest expenses, 325 million yuan in costs from idle or under-used pig farms, and as much as 938 million yuan in asset impairments. As a result, Tech-Bank’s share price dropped by 10% over two days.[para. 3]

4. The major impairments are linked to five pig farms acquired in 2021 from Zhejiang Xingnongfa Animal Husbandry Co. Ltd. Tech-Bank asserts the buildings, constructed by Zhejiang Construction Investment Group Co. Ltd., are so defective as to be unusable.[para. 4]

5. However, the dispute escalates beyond construction defects, involving accusations of collusive bidding, illegal subcontracting, inflated costs, and corruption investigations into Zhejiang Construction Investment's former leadership. The builder rejects the construction quality complaints as a tactic by Tech-Bank to avoid paying debts, highlighting that complaints only surfaced after an arbitration award was issued against Tech-Bank for unpaid bills.[para. 5]

6. The root causes trace back to the broader industry upheaval following the outbreak of African swine fever in China. Zhejiang Agricultural Development Group (ZJAD Group), a state-owned firm, had initially expanded northward to build massive pig farms as part of a “south pigs, north rearing” government strategy. However, after a devastating swine fever outbreak in Heilongjiang that led to the culling of about 70,000 pigs and the bankruptcy of the local venture, the focus shifted back to boosting porcine productivity in Zhejiang itself, with Tech-Bank invited as a strategic investor in 2019, acquiring a 38% stake in the effort led by state leadership.[para. 6][para. 7][para. 8][para. 9]

7. Despite the investment, the partnership between Tech-Bank and ZJAD Group was fraught with difficulty, as Tech-Bank had limited influence over decisions. In 2020, driven by an urgent need to ensure pork supplies, ZJAD Group initiated construction of five new pig farms, a move Tech-Bank insiders critiqued as reckless amidst market uncertainties.[para. 9]

8. The farm construction projects, contracted to Zhejiang Construction Investment in 2020, were allegedly beset with chaos and unlawfulness from the outset. Tech-Bank contends that construction began before contracts were signed, and raises serious claims of illegal and wholesale subcontracting, including to unqualified parties—a clear violation of Chinese law.[para. 10][para. 11]

9. Independent inspections in late 2024 revealed critical structural flaws, including thin foundation rafts, exposed steel, inadequate waterproofing, and dangerous manure ditches, with some facilities classified as structurally unsafe. Tech-Bank says only three of the five farms are marginally usable, and none meet original standards. Repair costs are estimated in the hundreds of millions of yuan.[para. 12][para. 13]

10. The cost overruns are stark: the original contract of 769 million yuan inflated to 1.3 billion yuan by project completion, which Tech-Bank claims far exceeds industry norms.[para. 14]

11. With Tech-Bank refusing to pay the disputed balance, Zhejiang Construction Investment filed for arbitration in 2024, demanding 1.3 billion yuan in unpaid fees, and prevailed. The Hangzhou Arbitration Commission ordered a payment of 1.15 billion yuan in July 2024, triggering bankruptcy proceedings for the farm operators and causing Tech-Bank to enter pre-restructuring due to its inability to pay.[para. 15][para. 16]

12. Tech-Bank responded in July 2025 by filing for 281 million yuan in damages to repair construction defects, arguing Chinese law holds contractors responsible for structural issues throughout the building's functional life. Zhejiang Construction Investment maintains the projects passed inspection in 2021 and considers Tech-Bank's claims belated attempts to avoid monetary obligations, arguing that any issues are repairable and non-critical.[para. 17][para. 18]