In 2012, I began pursuing a long-held dream on the outskirts of Beijing.
That April, Charoen Pokphand Group started operating an egg production plant in the farming village of Pinggu, situated northeast of the capital. I use the word plant because its operations are almost entirely automated, from mixing the feed through shipping the eggs. Each day, 2.4 million eggs are collected from 3 million chickens.
To prevent the spread of disease, the plant is almost entirely sealed off from the outside world. Pipelines carry the feed from mixing tanks to the henhouses, and conveyor belts carry the freshly laid eggs to a pickup site for shipping. Robotic arms similar to those in an automobile factory load the eggs onto trucks. Everything is controlled by computer.
Excrement from the birds is used as organic fertilizer in nearby fruit fields, and chickens that have become too old to produce eggs are processed for meat or used as feed for raising crocodiles. Reusing resources in this way protects the surrounding environment and at the same time reduces our operating costs.
There is no shortage of laborers in the farming village, but the plant employs less than a few dozen people.
Instead of putting them to work in the factory, we made around 5,000 of the neighboring farmers de facto shareholders in the company that operates it. We have arranged for the plant's profits to be distributed among these farmer-shareholders, and we guarantee to pay them a rental fee regardless of whether the plant is running at a profit or at a loss.
Our company may not recoup the investment we made building the factory from the operation of the facility itself, but we can secure profits from other areas of the supply chain, such as feed, chicken breeding and food processing, as well as from the downstream retail business. In 20 years, we will transfer ownership of this plant to a corporate entity comprised of farmers.
Why did we take the trouble of building an automated plant in a farming village where there is an abundance of labor?
First of all, this approach helps increase incomes in the village. Because we made farmers shareholders rather than using them as laborers, they are free to find work outside the factory, allowing them to earn a second income in addition to their dividend income. This means they can earn more than mere factory workers.
Secondly, we are preparing for China's falling birthrate and aging population, issues that are becoming a serious problem for the country. Due to the long-ranging impacts of the one-child policy China had in place until last year, even farming villages are seeing a decline in the number of young workers.
The future of work
The problem of a dwindling labor force will not be limited to China. Many Asian countries, most notably Japan, are grappling with graying populations and lower birthrates. This means automated factories are an increasingly vital means of supplementing the region's workforce. Turning production over to machines has the added benefit of eliminating mistakes by new or untrained workers that could undermine safety and efficiency.
I am keeping a close eye on developments in robotics and the artificial intelligence technology that supports them. Humans have steadily increased their power for production by mastering increasingly more powerful tools. My father worked without rest seven days a week. I introduced a six-day week at our company, with Sundays a day of rest, and subsequently expanded this to Saturday, creating a two-day weekend. We were able to do this by raising productivity through the use of machines. If we can make even greater use of robots, we can introduce a three-day weekend.
The 21st century will be the era in which robots free us from the drudgery of long, hard labor. Communism and socialism are the ideal forms of society, but it is difficult to realize them when there are shortages of food and other items. Automation can help eliminate such shortages and even create surpluses, allowing humankind to pursue these ideals. I want to help in that pursuit through business.
Dhanin Chearavanont is chairman of the Charoen Pokphand Group.