Case Study: Deqingyuan - IFC

Market Movers 6The Deqingyuan business case – the three most important factorsHere we highlight the three most important ways in which sustainability performance at Deqingyuan is influencing businessdrivers and supporting business strategy.1. Higher sales and market accessfrom better environmental andsafety standards– Based on Deqingyuan’s reputationfor quality and safety, sales grewfrom $0.4 million in 2002 to $6.7million in 2006.– Deqingyuan has 71% share of thebranded egg market in Beijing.– Deqingyuan entered HongKong market, which does nottraditionally source eggs frommainland China.2. Brand value and reputationbuilt on good environmentaland safety standards– High food safety based on soundenvironmental approach allowsDeqingyuan to create a trustedbrand.– During SARS crisis, which deflatedegg sales throughout China,Deqingyuan’s sales increased -evidence of high level of trustDeqingyuan enjoys with consumers.3. Access to capital from goodcorporate governance– Although industry has difficultygaining access to capital,Deqingyuan tapped intointernational investment fromGEF and IFC.– Investors are attracted by thecompany’s pioneering vision,quality and environmentalperformance, and seriousapproach to governance.– Deqingyuan commands higherprices per egg in Beijing (0.9 RMBper egg vs average of 0.3 to 0.4RMB per egg) and Hong Kong.Deqingyuan business case matrixEnvironmentalPerformanceSocialPerformanceGovernancePerformanceSales &Market AccessOperationalEfficiencyAccessto CapitalRisk Mgmt &Licence toOperateTalent &Human CapitalBrand Value &Reputation