Meet the Chinese investor who’s putting France on edge

Keqin Hu, the chairman of a detergent and food conglomerate, has discreetly amassed hectares of French arable land. In the first of a series, we gather clues about the billionaire businessman.

When it first emerged that Keqin Hu, a Chinese businessman, had acquired 1,700 hectares of wheat fields in France’s Indre region in 2016, controversy swirled. Unions denounced a “land grab”; the government promised a crackdown. In November, he did it again, purchasing 900 hectares in Allier for a reported €11 million. Protests erupted again.

Yet none of this surprised Christophe Decquidt, a French author and ag consultant. He’d met the man two years before, and already knew quite a lot about his plans. And he thinks the whole thing is rather blown out of proportion.

In 2014, Decquidt and his wife embarked on an ambitious project: a 13-month tour that would follow wheat harvests around the globe. They’d chosen the crop, he tells Agri Investor, because of its widespread cultivation and strategic dimension.

On the latter count, he soon proved to be right. Before Decquidt reached China, Hu established contact, inviting him to share a meal at his table. He wanted some advice. “Decquidt, you’re touring the world, you know agriculture well. Where would you go to buy land these days?” the Frenchman recounts being asked.

Bread and butter

Hu is the chairman of Beijing-headquartered Reward Group, a conglomerate founded in 1995 that’s become a big fish in the detergent and food industries. Forbes estimates his fortune at $1.28 billion.

Decquidt suggests, however, that Hu’s roots do not lie in business. The man is a former army general, he explains, who has been put at the top of a state-backed company during the economic liberalization era of Deng Xiaoping, with a mission to develop the group. While Agri Investor could not verify such details, Hu certainly seems to have taken this task to heart: Reward Group now owns an R&D center for household chemicals in the US and eight large-scale farms in France, according to its website.

Part of what irks French protesters is the assumed motivation behind his purchases. They reckon China is taking away French land to bolster its food security. The reality may be a little more nuanced that this, Decquidt observes. Simply put, Hu seems to have spotted a lucrative market he wants to target: China’s growing hunger for high-quality bakes, including French bread.

“Reward Group will bring in the high-end wheat flour from the main high-quality grain producing areas in Europe to China, trying its best to promote the grain and food safety from French farms to Chinese tables,” the company says on its website.

Bottomless budget

His plan is not limited to the upstream part of the ag value-chain. Reward Group claims to have “established the whole food industry chain covering agricultural cooperation, flour processing, terminal sales, and a nationally high-end bakery chain.” Notably, it has partnered with Axereal, France’s biggest grain cooperative, to help it supply flour to China as well as build up the company’s baking skills.

Hu is less transparent about how his farmland purchases are funded. There is a reason for this, Decquidt suspects. “I told him, ‘your plan sounds fine, but it seems it’s going to cost you quite a bit of money.’ He replied with a smile: ‘I don’t have a budget. My budget is the state’s,’” the author recalls. Being able to source agricultural products, he notes, is one of China’s national priorities.

Still, he sees the billionaire’s French venture as rather good news. Under French law, grain produced by farmers must be sold to trader-stockers approved by the authorities, rather than be put to the market directly. “To be able to export his raw material, Mr Hu has to create business in France,” Dequidt says. Hu’s sales to China will be counted as French exports, he observes, benefiting the country’s trade balance.

“This all adds value to French wheat. And I find this rather virtuous.”