Securing supplies

Executives at Dong-E-E-Jiao said the company has long faced a shortage of hides. Ironically, the problem emerged just as the market for TCM dietary supplements, especially ejiao, began to take off.

"In 2014, things were so bad that we had a 10-day period when we had no skins to use at all," said Liu Guangyuan, the vice-president.

In response, the company began looking overseas to find new sources of hides.

"Now, about 40 percent of the skins we use every year are imported," said Qin Yufeng, Dong-E-E-Jiao's CEO.

In the past 10 years, the price of ejiao has risen from more than 100 yuan per 500 grams to 2,986 yuan for the same amount. As profits rose, demand for hides soared, as did their price.

Before 2010, an entire donkey skin cost less than 500 yuan, but by 2015, the price had rocketed to more than 26,000 yuan, according to the Shandong Ejiao Industry Association.

Despite the fall in the price of skins in the past year or so, Dong-E-E-Jiao is determined not to become a hostage to fortune or market forces. In an attempt to ensure supply and reduce costs, the company has established 20 breeding bases in 14 provinces.

"By 2020, our bases across the country will produce enough hides to meet our basic needs," Qin said.

The company is looking to branch out. Though it imports hides from 10 countries, it is planning to extend its supply chain to nations in Central Asia and South America, and also import donkeys, not just skins, according to Wang Lifei, director of the importation department.

To make full use of the donkeys it will bring into the country, the company will develop a chain of businesses nationwide to exploit all the subsidiary products.

Last year, Dong-E-E-Jiao established a plant to process donkey meat and milk products, and it plans to open a chain of restaurants across the country in the next 10 years.

"We plan to create an online trading platform for suppliers with the aim of formulating national standards for the industry," Liu, the vice-president, said.

"For the first time, customers will be able to trace every donkey product back to its place of origin."

Contact the writer at xinwen@chinadaily.com.cn