Meat processor and exporter Silver Fern Farms is among a group of companies involved in the newly formed Primary Collaboration New Zealand Ltd, which will assist in quicker and easier entry to the complex Mainland China market.
Primary Collaboration has set up a China services company (ServeCo) as a wholly foreign-owned enterprise (WFOE) in Shanghai to provide ‘in-market’ services in the People’s Republic of China.
The collaboration stems from the inaugural New Zealand Primary Sector Boot Camp movement held by industry chief executives and government agency leaders at Stanford University in 2012.
Alongside Silver Fern Farms, member companies will initially include Sealord, Synlait Milk, Villa Maria Estate, Kono and Pacific Pace. The latter is a collaboration between Hawke’s Bay horticulture businesses Mr Apple, Crasborn Group and J M Bostock Group.
ServeCo will provide services such as central Shanghai office facilities, administration and support staff and food preparation for members’ in-market representatives.
The concept will enable members to provide a higher level of contact and locally-based liaison with their respective importers, wholesalers and customers. Further, ServeCo will grow relationships with Chinese authorities and New Zealand government agencies in China.
Primary Collaboration NZ chairman Andy Borland is managing director of Christchurch-based Scales Corporation which owns Mr Apple. He says ServeCo provides tangible benefits for members.
“China is probably New Zealand’s most important market now and in the future. However, many primary sector exporters have limited insight into the market beyond the point of scale which is often their China-based importer or distributor.
“We discussed this at length at the Primary Sector Boot Camp – how we could improve our understanding of the vast Chinese market. Creating an in-market presence to improve and facilitate our respective business interests there seemed like a no-brainer,” says Borland.
“Market knowledge is a valuable commodity and ServeCo has been set up to improve in this area and understand how it relates to the value chain and customers. We also want to lower the cost and risk of entry to China. It is the members who decide what services best suit their needs.”
Borland says ServeCo represents a good opportunity for New Zealand primary sector businesses with an eye on exports to China to be part of a bigger group and to enjoy economies of scale while sharing valuable insights.
New Zealand Trade & Enterprise (NZTE) has supported the venture by providing resources and co-investment. In effect, matching costs associated with the members’ formation funding. Chief executive Peter Chrisp says that NZTE is looking for opportunities to build coalitions of companies to go to market together.
“In a small country like New Zealand, it makes sense to collaborate to compete.”