Opening Doors to China : New Zealand's 2015 Vision - Te Puni Kokiri

10 Opening Doors to ChinaOpening Doors to China 11Pure New zealand Greenshell MusselsOver a decade ago, the Greenshell musselindustry made its first foray into China –with unpleasant results.Some Chinese distributors duped consumerswith counterfeit products leveragingoff New Zealand’s strong reputation forquality and food safety. A small and muddylocally-grown green mussel was foundpackaged and sold in-market under theguise of New Zealand’s iconic Greenshell.Distributors sprayed water over mussels andfroze them to add weight so they could sellfor more. Perhaps the biggest concern wasthe sale of cheap Chinese mussels under theNew Zealand name and counterfeit brandinginto highly valued third markets, such as theUnited States.It was difficult for Kiwi companies to addressthese issues so, with the added complicationof intense competition between New Zealandexporters driving down the Greenshell saleprice, exporters walked away from China andrefocused on other markets.It was eight years before sizeable volumesof New Zealand Greenshell musselsmade a return to the Chinese market in2010 – and these days, it’s much betternews. As a market, China has more promisethan most. It offers strong economicgrowth, an emerging ‘consumer class’ witha desire for quality imported foods, animproved regulatory regime (to limit thecounterfeiters) and a history of appreciatingGreenshell mussels.The other significant difference is thatseveral of the leading mussel producersare now working collaboratively under onebrand – Pure. The shareholder companies inPure New Zealand Greenshell Mussels areSanford Limited, Sealord, Kono NZ Limitedand NZ Greenshell. This approach combinesresources and shares the risk and it is thefirst marketing initiative of this nature andscale among mussel producers.Chinese businesswoman Vivian Zhanghelped establish the company while onsecondment from New Zealand Trade andEnterprise and has since become PNZGM’sShanghai-based general manager. With along history in business development forinternational New Zealand companies, Zhangbrings crucial Chinese business acumento the task of re‐establishing a significantGreenshell mussel market in China.“This collaboration is a long-term businessmodel looking for long-term profit. We arevery confident in the future,” Zhang says.Pure is sold into the food service sector,targeting western chefs familiar with theKiwi delicacy, and Asian chefs looking forinteresting new flavours.PNZGM is already a multi-million dollarexport venture and the target for 2012 isto double sales. The price paid for PNZGMproduct has risen from US$4.50/kg toUS$4.85/kg in the past year. This is criticalto maintaining export returns when theNew Zealand dollar remains strong.Zhang says members of PNZGM visitcustomers in China. She believes this isthe most important lesson for aspiringexporters: “People like to see Kiwi faces.It shows your commitment to the market.”Gary Hooper has worked closelywith PNZGM as marketing director ofAquaculture New Zealand – the industrybody that represents Greenshell mussels,New Zealand salmon and farmedPacific oysters.“Chinese consumers love our product andassociate New Zealand with quality andfood safety. The economic growth andassociated consumption is phenomenal.”Hooper says the collaborative approachused by PNZGM has sparked interestin adapting the approach for channeland market development elsewhere.Other export sectors have also asked forinformation about the model to understandwhether it might be applicable and useful.www.purenzgreenshell.com“It’s not really a case of identifying the potential. Thepotential is huge. The question is how we best convertthat potential into real economic growth opportunitiesfor our country.”Prime Minister John KeyAtraxKevin Maurice says no exporter shouldbe paralysed by the fear of intellectualproperty infringement in China. He’s hadhis intellectual property (IP) stolen orthreatened in Germany, Singapore andeven in New Zealand, but through goodmanagement and good luck, he’s yet tohave problems in China.Maurice set up design and manufacturecompany Atrax about 25 years ago. Hisweighing and measuring products aresold to other businesses which then installthem in airports around the world. Atraxproducts – from the small scales whichweigh your check-on baggage to the largescales used to weigh cargo for air freight– are in 101 countries from Iraq to ThePhilippines. One example is Hong KongInternational Airport, where every piece ofbaggage, freight or mail passing throughthe airport is routed over an Atrax scale.The company is well-positioned in Chinato take advantage of the surging demandfor air travel and resultant expansionof airports across Asia. Atrax beganmanufacturing in China about three yearsago, after Maurice sold off the domesticarm of his business to focus on exporting.There were a number of issues to resolvebefore Maurice was comfortable with hisChinese operation.He found it took substantial effort todocument his processes so he could relyon them being made to his standardsoffshore. He has now developed thedocumentation to ensure a consistentlyhigh standard, but he has also employedan engineering manager who spendsaround half his year in-market.Maurice also had to find a factory, andfor this he relied on his networks. Heand another New Zealand businessowner have collaborated to establish afactory in southern China which fulfilsboth their needs. The businesses havecomplementary technology but are inunrelated industries.Finally, Maurice had to tackle the issue ofIP infringement. While ensuring he hasall the necessary registrations in place,Maurice has also taken a much moresimplistic approach. He has segmentedhis business so that there is little contactbetween the design capability inNew Zealand, the manufacturing plantin southern China and the sales centre inShanghai. He routinely ships bulk goodsback to New Zealand where the productsare then loaded up with the software. And,whenever he uses a sub-contractor inChina, he will ask them to make a piece ofsteel or electronic part but never divulgewhat it is for.“Some of these things are in conflictwith Western management styles but I’mthe only guy who knows all the parts ofthe jigsaw.”Maurice encourages other Kiwi businesspeople to reconsider China if they’vepreviously dismissed it as too hard.“It is a big market. It is close to other partsof the world. Meanwhile, we are a far-flunglittle dot in the South Pacific. You can onlydo so much business from New Zealand.You need to get amongst it.”www.atraxgroup.com