Ressources Investment, a French agricultural land investment company, was established in 2016 under the leadership of Keqin Hu, a Chinese entrepreneur. In the 2010s, the organization became well known in the media by procuring hundreds of hectares of farmland in France.
Keqin Hu is the Chairman of Ressources Investment and the head of Reward Group, also known as in China.. Since its foundation in 1995, the Chinese company has expanded into three business areas, namely household products, real estate, and food, including milk powder marketing. In response to a food scandal related to milk in China, the group decided to diversify its sources by procuring products from countries that follow standard regulations. This approach was taken to restore consumer confidence in the products' quality. The superior quality of French production and the alluring potential of its land prompted billionaire Keqin Hu to invest in cereal farms in France. The objective was to ship the flour that was produced to support a forthcoming chain of 1,500 bakeries.
As a consequence of Reward Group's bankruptcy in 2019 and Keqin Hu's absence from the media spotlight, only three bakeries were established, marking the project's ultimate failure. Nevertheless, the farm acquisitions that Reward Group made during the 2010s have significant political ramifications. The deficiencies of France's land control agencies are brought to light and reignite concerns about the potential loss of food sovereignty resulting from foreign land grabbing.
Context
Keqin Hu project HongYang specializes in manufacturing and marketing equipment for service stations and the oil industry. The company conducts its operations in Europe through Beijing Reward International Trade, which was founded in 1995 and produces and markets milk powder. Keqin Hu, born in China in 1958 and married to Xia Zhao in 1992, leads the company. According to Forbes, he is ranked among China's wealthiest people, with a net worth of 1.22 billion dollars in 2018..
He plans to provide Chinese consumers with high-end baked goods, specifically "French-style" bread like baguettes or country bread. His goal for 2018 is to establish a chain of 1,500 bakeries within five years..
Chinese consumers' increased concern with traceability due to food scandals has led to higher expectations. He decided to source flour from France for guaranteed quality of raw materials and to maintain control over the entire production chain, from wheat cultivation to product distribution.(fr) "Hu Kegin: nous prenons un soin extrème de nos terres en France", Le Point, 23 february 2018 (read online). Despite a long-standing interest from Chinese investors in French vineyards, Keqin Hu's HongYang group regularly purchases cereal farms. Recently, they acquired a 13,000 hectare dairy farm in Mongolia. There is nothing novel in the procedure: neither are they the pioneers to have employed the method, nor the first non-natives to have done so. Agriland of Belgium possesses 12,000 hectares of land in the northern region..
The project's financial success, comprising flour production in France followed by its shipment to China, results from the economical land value in France when distinguished from the steep prices elsewhere. Keqin Hu made an agreement with French cooperative , represented by Jean-François Loiseau, to manage the harvest. In 2017, the cooperative shipped only 50 tons of flour to China and its bakers oversaw the training of their Chez Blandine counterparts.. The Chinese company even declared its intention to establish a school in 2018 where would teach their savoir.
Agri-business scandals in China The Chinese populace increasingly lost confidence in the quality and safety of their products. in a shift towards seeking safety assurances in countries with established standards. The food scandals that have plagued China have played a significant role in the emergence of Ressources Investment. The decline in consumer confidence, especially with regards to milk products marketed by firms owned by Keqin Hu, a Chinese billionaire, has pushed him to seek substitutes.
In 2008, China was rocked by a food scandal that centered on milk. Sanlu, one of the largest food corporations in China, had received complaints about their product line since December 2007. Their milk contained melamine, an ingredient classified as toxic by the WHO, which was added to exaggerate its protein content. The government concealed the scandal and rejected proposals to remove the tainted items from the market due to the country's heightened media exposure during the 2008 Beijing Olympics. The scandal's revelation in September 2008 originated from a New Zealand cooperative partner of Sanlu. According to official reports, the number of victims surpassed 290,000 after 10 months of distribution, with 51,900 hospitalized. There have been three recorded deaths and eleven suspected cases of melamine poisoning in the provinces.Chow Chung-yan, "Number of melamine-sickened children revised up five-fold", South China Morning Post, 2 december 2008, A9.
Battery manufacturers' mining operations discharged significant amounts of cadmium into the Longjiang River. The river is contaminated officially for over a hundred kilometers with the possibility of it extending to Hong Kong or Macau. According to readings, concentrations of the carcinogenic product exceed current Chinese standards by eight times, and local concentrations exceed the threshold by over 25 times. In fear of cadmium poisoning, residents of Liuzhou hastily purchased bottled water while Liujiang and its surrounding areas, which are home to 1.5 million people, are also at risk. The contaminated water affected the soil and rice fields.. According to Nanjing University, in 2013, 10% of China's rice production was contaminated, which poses a significant threat to a country where 65% of the population consumes rice daily.(fr) "Le riz au cadmium sème la panique en Chine", Le Point, 29 june 2013 (read online).
Affordable real estate in France
The , specifically family farming, is based on low land prices, which Safer, the price regulator, supports a priori. Farms must maintain their independence as family businesses and remain family-controlled in both capital and decision-making. Low prices should also facilitate capital acquisition for young farmers wishing to start their own businesses.(fr) "Le modèle agricole familial français menacé", Le Monde, 26 may 2016 (read online).
Subsequently, France has some of the most affordable arable land in Europe, with an assessed value of €6,060/ha in 2016. Due to its relatively affordable pricing, French land provides an attractive option for foreign investors. In Eastern Europe, land is priced at €9,100/ha in Poland and €12,000/ha in Slovakia which is higher than the rates observed in France. However, land in Romania, Estonia, Croatia and Lithuania is priced at less than €3,000/ha. Prices at the other end of the spectrum are much higher in the West, with €63,000/ha in the Netherlands, €40,000/ha in Italy, and €26,000/ha in Luxembourg and England... Even if a foreigner offers a price well above the French market price, it is still economical compared to the price in their home country. This results in both parties benefiting financially.
China faces significant challenges due to a scarcity of land on its territory,. leading to difficulties in meeting the population's production expectations. Despite needing to provide food for 20% of the world's population, it only has 8–9% of agricultural land available.. The intense land constraints on China have prompted the nation to invest abroad, specifically to secure their food supply. Instead of solely relying on the global market, China must now acquire the capacity to produce its food to avoid the devastating impacts of market failure, such as shortages and embargoes. But according to Jean-Joseph Boillot, China's agri-food industry remains outdated, but it still possesses the capability to sustain itself.
Land acquisition
The Reward Group is set to acquire a plot of land with the capacity to produce flour for a bakery chain, which aims to include 1,500 stores eventually.
These European land acquisitions, starting in 2013, are part of China's national strategy to ensure food security and promote private enterprise investments abroad. The group is currently developing Shuangwa Aliment (or Beijing Shuangwa Dairy Co., Ltd), its existing subsidiary established in 1998. In particular, it promotes the distribution of products that bear the label of French-imported wheat flour, specifically bags of flour originating from France..
Bypassing Safer The (Safer) ensure transparency in the rural land market. The organizations were established in accordance with the French agricultural policy law of 1960. Their objective is to improve landholding structures by creating new farms or forestry operations, or expanding existing ones through soil development and, if required, land parcel reorganization. Their responsibilities include diversifying landscapes, safeguarding natural resources and biological diversity, and communicating information regarding price trends and changes in the use of agricultural land to the relevant government departments as per decree conditions.Article L.141-1 du Code rural et de la pêche maritime sur le site Légifrance..
In order to uphold the stability of the rural land market, the local Safer has the right of pre-emption although there are restrictions imposed. Acquiring only a part of a company is not allowed. For the acquisition to occur, the entire company must be purchased or the ability to purchase the remaining portion must be obtained within two years in cases of partial acquisitions. If the buyer, or more precisely, the seller, does not intend to sell within two years, the Safer cannot pre-empt the purchase.
To avoid possible pre-emption, a legal loophole in the Safer's pre-emption right is used in preparing the acquisition. The laws applicable to direct land transfers differ from those for transfers through shares.. Land is often organized into a corporate structure such as a (SCEA) or a (GFA) for the purpose of easier land control and exchange. Through this system, the buyer obtains a share in the land while the seller retains ownership of the remainder. This method effectively avoids any possibility of a Safer exercising its right to pre-empt.
This methodology allows for the Chinese organization to obtain land while adhering to legal regulations, without the potential obstacle of the Safer impeding acquisitions. When SCAs are purchased, an intermediary, Marc Fressange, serves as manager or co-manager while maintaining the previous manager's position. Simultaneously, Jun Wang, HongYang's representative and Marc Fressange's spouse, approves specific acquisitions..
The intermediary, Marc Fressange
Land acquisitions in France are not directly carried out by Ressources Investment, where Marc Fressange serves as European Director. Instead, they are conducted through Chinese companies that belong to the Reward Group. Despite this, Fressange's role as head of purchasing management is critical.
Fressange, a French businessman born in Honfleur in 1962, holds a degree from HEC and previously served as CEO of EMW, the joint venture between Ascential and Wanadoo.
He later founded and directed , a company that specializes in importing and selling high quality French wines and food products in China. Chinese investors are familiar with this industry and have been purchasing numerous French vineyards since the early 2000s to promote wine tourism, attract customers, and expand their own marketing networks. Since 2002, the liberalization of the Chinese economy has encouraged these investments..