CK IMPORT EXPORT CO (NZ) LTD
China
the sleeping giant
The Market
The Future
NZ’s role in China’s future OR China’s role in NZ future
CK IMPORT EXPORT CO (NZ) LTD
China – 1.3 billion potential customers
Chinese priorities
1. Earning money
2. Personal Health
3. Family
Velvet is seen as an
adult medicine,
food or HFF
CK IMPORT EXPORT CO (NZ) LTD
China – where does our velvet go?
–
South Korea consumes 62% of all
NZ Velvet but directly imports
only 27% of NZ Velvet.
•
–
–
The remaining 35% is imported via
China
68% of all NZ velvet is exported
to China
Exported in via Dalian or Hong
Kong
•
Hong Kong was the gateway to China
(smuggling), now Dalian with the free
trade agreement.
–
From Dalian port – 6hr road trip
to Xifeng for processing &
distributing throughout China.
–
In China – 8 key consumption
areas for velvet areas.
•
Mainly East Coast – population.
CK IMPORT EXPORT CO (NZ) LTD
The Market –NZ Exports
68% exported to China/ Hong Kong in 2012
$ Sales – NZ Velvet Exports
KG Sales – NZ Velvet Exports
250,000
$35,000,000
$30,000,000
OTHERS
OTHERS
200,000
VIET NAM
VIET NAM
$25,000,000
USA
USA
$20,000,000
AUSTRALIA
150,000
AUSTRALIA
JAPAN
JAPAN
$15,000,000
TAIWAN
$10,000,000
KOREA
KOREA
HONG KONG
HONG KONG
CHINA
$5,000,000
$0
2008 2009 2010 2011 2012P
Year ending 30th Sept
TAIWAN
100,000
50,000
CHINA
2008
2009
2010
2011 2012P
Year ending 30th Sept
South Korea consumes 62% of all NZ Velvet but imports only 27%
of NZ Velvet.
35% is imported into South Korea via China.
Source: DINZ 2013
CK IMPORT EXPORT CO (NZ) LTD
700.00
$140.00
600.00
$120.00
500.00
$100.00
400.00
$80.00
300.00
$60.00
200.00
$40.00
100.00
$20.00
2011/12P
2010/11
2009/10
2008/09
2007/08
2006/07
2005/06
2004/05
2003/04
2002/03
2001/02
2000/01
1999/00
1998/99
1997/98
1996/97
1995/96
$0.00
1994/95
-
Average Farm price per Kg
Total Tonnes exported per year
Farm Price Vs Kg’s Exported.
Production
Price
Year ending 30th Sept
Source: DINZ 2013
CK IMPORT EXPORT CO (NZ) LTD
Farm Price Vs Currency.
0.90
$140.00
0.80
0.70
$100.00
0.60
0.50
$80.00
0.40
$60.00
0.30
Average Farm price per Kg
$40.00
0.20
$20.00
0.10
Currency
avg Jan
Price
Year ending 30th Sept
2011/12P
2010/11
2009/10
2008/09
2007/08
2006/07
2005/06
2004/05
2003/04
2002/03
2001/02
2000/01
1999/00
1998/99
1997/98
1996/97
$0.00
1995/96
1994/95
Average currency January each year
$120.00
CK IMPORT EXPORT CO (NZ) LTD
The Market
– how is our velvet used by the consumer
• Broken into 3 groups
–
–
–
Traditional – raw state put into food
Oriental – used by oriental medical doctors
Healthy Functional Food (HFF)
100%
100%
80%
80%
60%
HFF
60%
HFF
40%
Oriental
40%
Oriental
Traditional
20%
0%
Traditional
20%
0%
2005 2013 2020
South Korea
2005
2013
2020
China
Estimate only
CK IMPORT EXPORT CO (NZ) LTD
CK IMPORT EXPORT CO (NZ) LTD
CK IMPORT EXPORT CO (NZ) LTD
CK IMPORT EXPORT CO (NZ) LTD
Approx. 25 – 30% of HFF
velvet sales used in
drinks
The Future
Healthy Functional Foods (HFF)
• Was predicted to reach US$12billion
sales in China by 2010 –
Food Manufacture Magazine 2007
• HFF are products ready for consumption
purchased over the counter
• Examples • capsules, drinks, health bars etc. for busy westernised
lifestyles
• Alcohol products containing velvet (eg wine or spirits with
velvet fermented), tonics.
• Ingredient in a finished product – eg chewing gum, probiotic
yoghurt
CK IMPORT EXPORT CO (NZ) LTD
Barriers to HFF Market
• Barriers to HFF Market:
– Chinese govt only allows Malu velvet to be used. Need
recognition of NZ Red Deer.
– Terms of Trade – Need NZ Red Deer recognised as
suitable ingredient in HFF
– We need to be in this market for Velvet exports to
continue.
– legal access for NZ velvet in raw state for use in HFF
ingredient
– NZ branded products sold in China – 2 year process
and costly
CK IMPORT EXPORT CO (NZ) LTD
What is HFF to the future of NZ
exports to China
• China is becoming more westernised.
• The traditional and oriental market is mature.
– The future is healthy functional foods (HFF)
• First capsules
• Then drinks – tonics & wine
• Missing out on a US12billion + market
– Challenges:
• legal access for NZ velvet in raw state for use in HFF
ingredient
• NZ branded products sold in China – 2 year process and
costly
CK IMPORT EXPORT CO (NZ) LTD
Influencers to exporting to China:
• Central Govt/ The Premier:
– Influence consumer behaviour – eg Wine sales decreasing
as new premier enforced Chinese govt officials need to reduce alcohol
consumption.
– Can dictate alter trading terms although it is free
terms of trade.
• Currency – strength of NZD to USD
• Stock Piles of velvet
CK IMPORT EXPORT CO (NZ) LTD
What the Chinese like!
CK IMPORT EXPORT CO (NZ) LTD
NZ velvet to China
• Currently two ways
– 1. Via an Exporter
• Pros
– increased stability
– pays GIB
– promote NZ velvet
• Cons
– ????
– 2. Sold direct to Chinese buyer
• Pros –
– the farmer gets paid immediately for their velvet for this season
• Cons –
– Future seasons the value of velvet could decline and Chinese buyers are few and
they TALK! Supply and Demand.
– Don’t pay GIB that markets and promotes the end product
– Consistency in price & demand for the future
CK IMPORT EXPORT CO (NZ) LTD
Thank – you
Questions at the end of the session
Would like to introduce
-Pei from Vitaco