Multinational seed companies achieve localization in China

The Chinese version of this paper has been written by Tong Pingya, then translated and edited into English by CCM and issued in CCM’s latest monthly newsletter, Seed China News 1304. Tong Pingya, Researcher in the Chinese Academy of Agricultural Sciences, has been involved in the scientific study on corn and agricultural development strategy for a long time. With his great experience, Mr. Tong acts as a senior consultant for both government departments and non-government organizations.

With its huge market, China is the second largest consumer of crop seeds, attracting great attention from multinational seed companies. The Chinese seed market has a great potential for commercial interests. Indeed, for multinational seed companies, China is not only a large consumer market, but also an unmatched production base for crop seeds. Entering the Chinese market and developing along with the development of the Chinese seed industry becomes an important strategy for multinational seed companies to achieve a global victory in the intense competition of seed market.

Considering the disparity of culture and values between China and the West, multinational seed companies know well that they have to adopt a localization strategy to settle, develop and expand in China, especially workforce localization. Following the saying "When in Rome, as do as the Romans do", they try to tap into Chinese economy and society as soon as possible in terms of talent training and reserve, from germplasm resources collection to variety breeding, corporate culture to the public welfare, technology transfer from home to R&D in China, etc. With a solid base for the localization in China, multinational seed companies have a clear path to achieve a rapid expansion.

There are generally four major strategies for multinational seed companies to achieve their localization in China.

The first is setting up joint ventures. Multinational seed companies clearly understand that they can't set up a company and dominate the Chinese market by themselves in a short time. Nevertheless, they can do so by cooperating with large seed companies in China. For example, in the 1990s, Monsanto respectively set up joint ventures with local seed companies in Hebei Province and Anhui Province, successfully introducing its Bt cotton variety in China. Some other multinational enterprises like DuPont, Syngenta and KWS followed this kind of strategy and successfully tapped into the Chinese seed market.

The second is setting up R&D bases. Aiming to strengthen technology export and market-oriented R&D, multinational seed companies have built a variety of R&D institutes in China. For example, in Oct. 2008, Syngenta established a biotechnology R&D center in Beijing, China's first agricultural biotechnology research institution set up by foreign capital. Then, in Oct. 2012, Syngenta jointed the Hubei Academy of Agricultural Sciences to set up an innovation center for natural products in Wuhan City, Hubei Province. Besides, in 2009, Monsanto established a R&D company named Monsanto Biotechnology Research (Beijing) Co., Ltd. The same year, Monsanto started conducting a collaborative research with the Chinese Academy of Agricultural Sciences in various ways by signing a Memorandum of Understanding with the latter.

The third comes with the employment of senior consultants. This is another crucial step for multinational enterprises to achieve their localization in China though it demands some preparatory work. For example, some multinational seed companies or international consulting institutes provided a financial aid for a number of scientific researchers who went abroad for study or training in the 1980s and 1990s. After returning China, most of these researchers occupied a position in research institutes, universities, associations or even government agencies. Many of them became senior consultants in multinational seed companies, including those who were promoted as academicians or important officials influential in certain field. With the combination of their senior consultants and capital strength, multinational seed companies are likely to influence the Chinese political, economic and scientific decision-making, helping to accelerate their localization in China.

Training professionals is another far-sighted and prepared strategy for multinational seed companies to completely tap into the Chinese market. Since 2000, DuPont has established scholarships in China's key universities such as Tsinghua University, Peking University, China Agricultural University, etc., with a total annual grant of USD100,000 divided among 2,000 students. In Oct. 2010, with the help of China's Ministry of Agriculture, Monsanto launched the Monsanto Scholarship Program in the Chinese Academy of Agricultural Sciences, China Agricultural University, Shandong Agricultural University, etc. Monsanto tends to award the outstanding undergraduate and graduated students determined to engage in R&D or industry in agriculture and life sciences' fields. It is worth mentioning that some masters and PhD hold key positions in research institutes and seed companies that had granted them, like Monsanto.

The disorder and underdevelopment of the Chinese seed industry means a great business opportunity for multinational seed companies. Their localization strategy paves the way to their sole proprietorship in the future. Currently, multinational seed companies are still prohibited for sole proprietorship or operation holding in China, but their acceptance is only a matter a time after their localization in the Chinese market. After all, being confident with the Chinese seed market, policy and law, multinational seed companies will transfer their joint ventures into sole proprietorship rather than withdraw their investment,

In the operating strategy, multinational seed companies comply with the Law of Global Chain, namely "customers' following" and "global key accounts". They tend to study seriously the local seed market, sales network, management localization and appropriate partners before expanding their business chains into a country. They won't hesitate to tap into a market when they believe that there is an opportunity with desirable customers or appropriate partners. Therefore, the Chinese seed market is not only facing world-class leading multinational seed companies, but also the huge and effective international industrial chain.

Table contents of Seed China News 1304:

Winall Hi-tech' M&A gets reward in 2012

Seed business of DBN develops stably in 2012

Shandong Denghai performance sees growth in 2012

China's first fund for seed industry set up

Second batch of seed enterprises gain operation license nationwide

Multinational seed companies achieve localization in China

Domestic fresh corn industry under vigorous development

Domestic potato seed companies hard to become bigger

Large grain growers: thriving but in straits

Wang Feng: "Super Rice" subjective gauge rather than objective standard

China's soybean import dramatically reduces in Q1 2013

Seed China News, a monthly publication issued by CCM at the end of every month, mainly covers a diversity of topics, including market dynamic, company dynamic, crops, seed market, etc. With the latest news in seed industry and in-depth analysis on government direction and market competition, Seed China News can provide you with valid information which would help you make rational decisions in investment, production, marketing, etc.

About CCM

CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals, CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis, and consultancy service. 

For more information, please visit http://www.cnchemicals.com.

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Introduce to sweeteners usage habit of the Chinese

On 15 March 2013, Quantum Hi-Tech (China) Biological Co. Ltd (QHT), a main functional oligosaccharide producer in China, announced that the company will invest USD7.97 million (RMB50 million) at most to purchase banks' wealth investment products, aiming to bring more profit in the company. It is worth mentioning that the amount of QHT's investment is higher than its net profit in 2012. According to the 2012 annual report of QHT released on 20 March 2013, the net profit of the company only reached USD5.63 million (RMB35.28 million) in 2012.

On 19 March 2013, PureCircle (Jiangxi) Co. Ltd (PureCircle) has organized a promotional meeting on stevia in Pan Cun Town, Mingguang City, Anhui Province according to the official website of the local government. During the meeting, Wu Dongquan, the vice president of PureCircle, analyzed the current situation of the global stevia sweetener market and the development plan of the company's raw material bases. He showed that the demand for stevia will increase in 2013, and that the company will adopt a development mode of "Company + Cooperative + Grower" to control the planting base's construction, in which the company will implement the purchasing program" a high quality and a high price" and "a minimum protective price", with a purchasing volume of stevia of more than 20 thousand tonnes in 2013.

In the past, most of the Chinese tended to be conservative, when talking about the use of sweeteners, though they had been approved by the government for a use in the food and beverage industry. That's because Chinese people, largely influenced by the traditional Chinese medicine theory, prefer natural things to artificial ones. To most people in China, natural things are more trustworthy and safer than artificial chemicals. Therefore, even trivial incidents or small news about the effects of this sort of food additives on health will have a large impact on the public, and even the government's attitude towards such ingredients.   The Chinese government's management of sweeteners, especially artificial ones, is as strict as that of preservatives. Sucralose, as one kind of sweetener, is subject to strict laws and regulations.

Sweeteners China News is a monthly publication released by CCM. It offers timely update and close follows up of China’s various kind of sweeteners market dynamics, analyze the market data and trends. Major columns include market dynamic, company dynamic, raw material supply, price update, import & export analysis, consumption trend & competitiveness.

About CCM

CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals, CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer.

For more information, please visit http://www.cnchemicals.com.

Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China
Tel: 86-20-37616606
Email: econtact@cnchemicals.com

Phosphate projects in Tunisia and Togo were also in full swing

Since the Tunisian government started the Sra Ouertane phosphate project in 2009, it has attracted many tenderers to join the project, including National Mineral Development Co., Vale SA, etc. According to the initiate scheme for the project, it designed a 4,000,000t/a phosphorus ore production line to provide the phosphate compound fertilizer (DAP, MAP, TSP) production line with feedstock, according to CCM’s January issue of Phosphorus Industry China Monthly Report.
 
In addition, Togo is also pushing forward a mega phosphate project in an orderly way—the Togo carbonated Phosphate Project (''Togo Project''). Recently, the government of Togo has ushered in its third tender for Togo Project—Elenilto, on the heels of Sultan Corporation (Sultan) and Balamara Resources Limited (Balamara).
 
Togo Project is targeted at developing a carbonated phosphate mine with reserve of two billion tonnes in Togo, which is contributed to reviving phosphate industry of Togo. In accordance with Elenilto's plan, it designed a capacity of 5,000,000t/a of phosphate rock exploitation for the first stage of Togo Project, which could be raised to 10,000,000t/a in the next stage. After that, these phosphate rocks would be applied for producing downstream phosphate fertilizer, e.g. DAP and MAP.

Phosphorus Industry China Monthly Report is a monthly publication released by CCM. It offers timely update and close follow up of China’s various kind of Phosphorus market dynamics, analyze the market data and trends. Major columns include market dynamic, company dynamic, raw material supply, price update, import & export analysis, consumption trend & competitiveness.

About CCM

CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals. CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer.

For more information, please visit http://www.cnchemicals.com.

CCM International Ltd.
Guangzhou CCM Information Science & Technology Co., Ltd.
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How to Develop Seed Coatings in China

A talk about how to develop seed coatings in China, is going to be held during CCM International’s CCPS 2012 on March 9^th , 2012 at Ramada Plaza Gateway Shanghai, China.

The topics related to seed, such as seed coating, seed treatment, seed policies, etc., attracts more and more interest among people in China. Baiming Liu, Factory Director to Shandong Huayang Technology Co., Ltd., will make a speech about the development of seed coating in China.

With precise data and profound analysis, Mr. Liu will share some useful advices on how to develop seed coating in China. He will illustrate the current market situation of domestic seed coating, together with key players in this industry. By introducing the government’s policies and future trend of seed coating, Mr. Liu will point out some strategy for development.

Do not miss this amazing presentation by Mr. Liu! Come and join our CCPS 2012! We are looking forward to your participation!

The speech will focus on the following aspects:

-Current situation of seed coating in China

-Key companies for this market

-Government’s policy and future trend for seed coating

-Strategy for development seed coatings in China

Baiming Liu, majoring in organic synthesis of Chemistry Faculty, was graduated from Ocean University of China in 1990. Mr. Liu had been working as a technician in a workshop of Technical Production in Huayang Group from 1990 to 1994. He was appointed to be the workshop director from 1994 to 1997. After that, Mr. Liu became the Factory Director of Seed Coating Factory in Huayang Group. He has been taking full charge of the production, technology development and sales of seed coating products of Huayang Seed Coating Factory since 1998.

For more information about CCPS 2012, please check our website page: http://www.cnchemicals.com/Event/EventDetail.aspx?EventId=26.

For event booking, please contact Coco Yang at econtact@cnchemicals.com or 86-20-37616606.

About CCM

CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals. CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer.

For more information, please visit http://www.cnchemicals.com.

CCM International Ltd.
Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China

Tel: 86-20-37616606

Email: econtact@cnchemicals.com

Source: http://www.cnchemicals.com/PressRoom/PressRoomDetail_c_901.html