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China’s data center market will shortly have a new server farm - provided by an actual farmer. An agricultural company from Shandong Province which plans to raise 2.3bn CNY ($370m) to build an internet-connected data center to provide hosted services.

Lontrue of Shandong in North-East China plans to issue 245 million shares to around five investors. Lontrue will invest most of the the money in a new data center, with the rest funding other projects. The new data center will cost 2.07bn CNY ($330m), of which and 1.8bn CNY ($290m) will come from the money raised. 

China farm Shandong
China farm Shandong – thinkstock photos

Growth market?

Lontrue is an agricultural farm with t 832m CNY ($134m) turnover, whose main business is growing, storing, and supplying fresh fruit and vegetables, dried fruits, seeds and nuts. It has contracted 80000 acres of orchard, and owns warehouses capable of storing 52,000 metric tons of goods, as well as three manufacturing plants covering about 380 acre of land.

The company said it is moving into the electronic information industry in search of more profits, allowing it to dissipate risks and improve its revenue structure.

Lontrue expects the new data center to generate 840m ($135m) CNY rental income and 276m ($44m) CNY income from operations each year, from equipment hosting and outsourcing services.

Rich fields?

China’s data center market seems to be attracting plenty of entrants from other markets. China’s steel giant, Baosteel, used a holding company, Shanghai Baosight Software to provide data centers for the Shanghai subsidiary of China Telecom and the Shanghai subsidiary of China Mobile.

Raycom, a real estate company focusing on developing commercial and residential properties is also developing a large cloud computing data center in Daqing, Helongjiang Province in Northeast China. Built with 300m CNY ($48m) the project is expected to have a floor space of 30,000 sq m capable of hosting about 50,000 servers.

According to research company IDC, there were more than 500,000 data centers operating in China in 2012, and the market is expected to grow at around ten percent from 2012 to 2017, reaching more than $19bn by 2017.

Edited by Peter Judge