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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 Earning money Personal Health Family. - PowerPoint PPT Presentation
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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
CK IMPORT EXPORT CO (NZ) LTD
Velvet is seen as an adult medicine,
food or HFF
Chinese priorities1. Earning money2. Personal Health3. Family
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
2008 2009 2010 2011 2012P$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
OTHERSVIET NAMUSAAUSTRALIAJAPANTAIWANKOREAHONG KONGCHINA
The Market –NZ Exports
South Korea consumes 62% of all NZ Velvet but imports only 27% of NZ Velvet. 35% is imported into South Korea via China.
68% exported to China/ Hong Kong in 2012
Source: DINZ 2013
Year ending 30th Sept2008 2009 2010 2011 2012P
-
50,000
100,000
150,000
200,000
250,000
OTHERSVIET NAMUSAAUSTRALIAJAPANTAIWANKOREAHONG KONGCHINA
Year ending 30th Sept
KG Sales – NZ Velvet Exports$ Sales – NZ Velvet Exports
CK IMPORT EXPORT CO (NZ) LTD
Farm Price Vs Kg’s Exported.19
94/9
5
1995
/96
1996
/97
1997
/98
1998
/99
1999
/00
2000
/01
2001
/02
2002
/03
2003
/04
2004
/05
2005
/06
2006
/07
2007
/08
2008
/09
2009
/10
2010
/11
2011
/12P
-
100.00
200.00
300.00
400.00
500.00
600.00
700.00
$0.00
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
$140.00
Production
Price
Tota
l Ton
nes e
xpor
ted
per y
ear
Year ending 30th Sept
Average Farm price per Kg
CK IMPORT EXPORT CO (NZ) LTD
Source: DINZ 2013
1994
/95
1995
/96
1996
/97
1997
/98
1998
/99
1999
/00
2000
/01
2001
/02
2002
/03
2003
/04
2004
/05
2005
/06
2006
/07
2007
/08
2008
/09
2009
/10
2010
/11
2011
/12P
-
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
$0.00
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
$140.00
Currency avg Jan
Price
Farm Price Vs Currency.Av
erag
e cu
rren
cy Ja
nuar
y ea
ch y
ear
Average Farm price per Kg
CK IMPORT EXPORT CO (NZ) LTD
Year ending 30th Sept
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)
2005 2013 20200%
20%
40%
60%
80%
100%
HFFOrientalTraditional
2005 2013 20200%
20%
40%
60%
80%
100%
HFFOrientalTraditional
ChinaSouth Korea
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
The FutureHealthy 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
Approx. 25 – 30% of HFF velvet sales used in
drinks
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 – youQuestions at the end of the session
Would like to introduce -Pei from Vitaco
CK IMPORT EXPORT CO (NZ) LTD
