Post on 16-Jan-2016
transcript
Moderated by: Jonathan Watt
Head China UnitNorth Asia Division
Ministry of Foreign Affairs + Trade(MFAT)
Opening Doors in China
New Zealand China Strategy
New Zealand China Strategy
The Government NZ Inc strategies•Set goals and priorities for New Zealand’s key country and regional relationships •Coordinate government efforts •Boost New Zealand’s growth•Target key markets•Engage and support business
New Zealand China Strategy
Why China?•World’s second largest economy – still growing relatively fast; major influencer in Asia Pacific region•By 2016 China could be the world’s largest economy•By 2025 China is likely to be New Zealand’s largest economic partner •We need to identify opportunities now for future growth•NZ’s relationship with China is crucial to delivering on government’s Economic Growth Agenda
New Zealand China Strategy
New Zealand China Strategy
New Zealand’s China challenge•To translate excellent political ties and a trading framework into tangible benefits for New Zealand.•To utilise our strong levers – China New Zealand FTA (2008), four firsts, knowledge and connections
New Zealand China Strategy
New Zealand China Strategy
The vision for 2015:
“New Zealand and China have strong and resilient economic, political and people to people
relationships which have stimulated New Zealand’s innovation, learning and economic
growth.”
New Zealand China Strategy
Goal 1 - Retain and build a strong and resilient political relationship with China
•Importance of political relationship•Ministerial visit programme – especially in context of 40th anniversary•Establishment of NZ China Council
New Zealand China Strategy
Goal 2 - Double two way goods trade with China to NZ$20 billion by 2015
•NZ exports have tripled since FTA•Underpinned by commodity growth•Development of higher value products and services.•NZTE focus on high growth companies project and priority sectors.
New Zealand China Strategy
Goal 3 - Grow services trade with China, education by 20%, tourism by 60%, by 2015
•High value, profitable non-commodity growth•Education market analysis and develop targeted branding and promotion campaign•Support and facilitate expanded air links
New Zealand China Strategy
Goal 4 - Increase bilateral investment to levels that reflect the growing commercial relationship with China
•Current levels low, room for growth•Creation of Investment advisory positions based in China
New Zealand China Strategy
Goal 5 - Grow high quality science and technology collaborations with China to generate commercial opportunities
•Commercially-focused initiatives under the NZ China Strategic Research Alliance.•Lanzatech – NZ technology and Chinese capital in commercial venture
New Zealand China Strategy
Cross-cutting Value Proposition: Develop and Protect the New Zealand brand
– Safe food– World-beating tourism– Tikanga Maori
New Zealand China Strategy
Ministry of Foreign Affairs and Trade Role:•Protect and promote New Zealand's interests in China•Leadership role for the official relationship – Leadership role for the official relationship – onshore and offshoreonshore and offshore•China Strategy CoordinationChina Strategy Coordination•4040thth Anniversary Anniversary•Opening doors for businessOpening doors for business
New Zealand China Strategy
New Zealand China Free Trade Agreement•Since October 2008, bilateral trade has increased Since October 2008, bilateral trade has increased 50% - NZ exports have increased 150%.50% - NZ exports have increased 150%.•Preferential tariff rates resulted in duty savings of NZ $130 million over the last two years.•Over 90% of tariff lines duty free since Jan 2012. Over 90% of tariff lines duty free since Jan 2012. •Keen for business feedback on challenges and opportunities.
New Zealand China Strategy
OPENING DOORS TO CHINA: NEW ZEALAND’S 2015 VISION
http://www.mfat.govt.nz/NZ-Inc/6-Opening-doors-to-China/index.php
New Zealand China Strategy
Moderated by: Jonathan Watt
International Market ManagerNew Zealand Trade + Enterprise
(NZTE)
Opening Doors to China - Introducing the NZ Inc China Strategy
John BedkoberInternational Market ManagerNew Zealand Trade and Enterprise18th May 2012
New Zealand’s exports to China have been growing strongly while the trade deficit has been shrinking
Trade with China 2006-2011NZ $BN
*Figures are rounded to the nearest billion and are for exports of goods only.**NZTE customer numbers include service companies
12,000
Export goods earnings, year to June 2011*
$36billion
$5billion
$3billion
Companies $5-$25m
Companies< $5m
460
*Figures are rounded to the nearest billion and are for exports of goods only.**NZTE customer numbers include service companies
We are sharpening our focus… strategy is about choice
260Companies
earning >$25m
Number of New Zealand exporters
Focus 500
2000 NZTE CUSTOMERS
For NZTE… we are focusing on commercial companies
Moderated by: Jonathan Watt
Logistic MangerNew Milk
NZ NewMilk Ltd. confidential. Do not circulate, quote, reproduce, or distribute without written approval from NewMilk.
EPIC NZOpening the Doors to China
Presenter Cameron Zhang fromNew Zealand New Milk Ltd. 新西兰新牛奶公司
NZ NewMilk Ltd. confidential. Do not circulate, quote, reproduce, or distribute without written approval from NewMilk.
New Milk introduction
• We are an infant formula OEM manufacture.– Focusing on formulated premium dairy products– Packing format includes 900g, 400g and 200g cans and
easy opening sticks
NZ NewMilk Ltd. confidential. Do not circulate, quote, reproduce, or distribute without written approval from NewMilk.
NZ NewMilk Ltd. confidential. Do not circulate, quote, reproduce, or distribute without written approval from NewMilk.
New Milk introduction
• Located in the Airport industrial park – Modern hygienic factory– Efficient equipments
NZ NewMilk Ltd. confidential. Do not circulate, quote, reproduce, or distribute without written approval from NewMilk.
NZ NewMilk Ltd. confidential. Do not circulate, quote, reproduce, or distribute without written approval from NewMilk.
New Milk introduction
• We don’t own brands and don’t marketing in retail markets
• We make infant formula products based on client required specification, and packing format
• One stop turn key service, including formulation
NZ NewMilk Ltd. confidential. Do not circulate, quote, reproduce, or distribute without written approval from NewMilk.
NZ NewMilk Ltd. confidential. Do not circulate, quote, reproduce, or distribute without written approval from NewMilk.
Stakeholder Position
NZ NewMilk Ltd. confidential. Do not circulate, quote, reproduce, or distribute without written approval from NewMilk.
-CIQ: China Entry-Exit Inspection and Quarantine-Customs
-MAF & NZFSA-NZTE-NZCTA
-Existing clients-Cash cow market
-New adventure-Future market-Marco Polo story
NZ NewMilk Ltd. confidential. Do not circulate, quote, reproduce, or distribute without written approval from NewMilk.
Government Agencies
• CIQ: China Entry-Exit Inspection and Quarantinehttp://en.ciqcid.com/– Understanding rules and regulations– Be open minded– Find the right partner
• NZ China FTA– Competitive tariff vs Non-tariff barriers– E.g. low tariff rates give advantage to NZ products– E.g. testing regulations raise the bar for imports
NZ NewMilk Ltd. confidential. Do not circulate, quote, reproduce, or distribute without written approval from NewMilk.
CN Govt. Agencies
NZ NewMilk Ltd. confidential. Do not circulate, quote, reproduce, or distribute without written approval from NewMilk.
Government Agencies
• Examples and Discussion:– GB standards in diary industry– E.g. one trading company brought products from
Europe to China without even considering quarantine and standard issues, the products had been returned (more seriously, it could be destroyed).
• Suggestion:– Understand your sector in China– Do enough homework– Finding the correct party to talk to– Always be cautious
NZ NewMilk Ltd. confidential. Do not circulate, quote, reproduce, or distribute without written approval from NewMilk.
CN Govt. Agencies
NZ NewMilk Ltd. confidential. Do not circulate, quote, reproduce, or distribute without written approval from NewMilk.
Agencies
• MAF & NZFSA– Provide manufacturing rules and regulations
• NZTE– Different programs to facilitate trade
• NZCTA– Large NZ China business memebers– Member events provide market info. and networking
opportunities– Valuable experiences to be shared
NZ NewMilk Ltd. confidential. Do not circulate, quote, reproduce, or distribute without written approval from NewMilk.
NZ Agencies
NZ NewMilk Ltd. confidential. Do not circulate, quote, reproduce, or distribute without written approval from NewMilk.
Markets
• Everyone has its own China storyChina is not that different from any other business environment
– Value for money– Long term relationships– Meeting their supply requirements– Quality– Profits
• Target market section• Finding the better trusted corporation partner
NZ NewMilk Ltd. confidential. Do not circulate, quote, reproduce, or distribute without written approval from NewMilk.
CN Market
NZ NewMilk Ltd. confidential. Do not circulate, quote, reproduce, or distribute without written approval from NewMilk.
Markets
• Some General Points#1 Quality and Premium – Not just a perception#2 Flexibility and able to understand the unique local environment#3 Use your strengths#4 Don’t forget the small talk (cultural)#5 Negotiating Skills#6 Control of your organization in China (WOFE/ Representative Office or JV)#7 Have a robust strategy with many facets#8 Use the NZ resources available#9 Have determination otherwise its hard to last the distance!#10 Differentiate yourself form your competitors by innovation and smarts – Our clients are very entrepreneurial they expect the same from suppliers.
NZ NewMilk Ltd. confidential. Do not circulate, quote, reproduce, or distribute without written approval from NewMilk.
CN Market
NZ NewMilk Ltd. confidential. Do not circulate, quote, reproduce, or distribute without written approval from NewMilk.
Markets
• Challenges:– Attaining legal status to operate, export, import– Understanding cultural differences– Achieving a work life balance while working in
China– Completing the work to a quality standard that
meets your clients expectation– Being cost competitive with local companies and
foreign companies who are well established in China
NZ NewMilk Ltd. confidential. Do not circulate, quote, reproduce, or distribute without written approval from NewMilk.
CN Market
NZ NewMilk Ltd. confidential. Do not circulate, quote, reproduce, or distribute without written approval from NewMilk.
Markets
• Solutions:– Form a WOFE where we have complete control– Use a combination of local on the ground services (accounting, legal)
and international firms– Employ Chinese staff who have spent sufficient time in New Zealand to
understand New Zealand business thinking, culture and language. (usually tertiary educated in NZ)
– Employ local resources and use local suppliers where possible to maintain competitive edge
– Offer a unique solution that other competitors can not offer– Work hard, but socialize with the locals so you understand their way of
life and thinking– Utilize trade associations (NZTE etc, we have probably not done this
enough)– Have a long term outlook and develop long term relationships
NZ NewMilk Ltd. confidential. Do not circulate, quote, reproduce, or distribute without written approval from NewMilk.
CN Market
NZ NewMilk Ltd. confidential. Do not circulate, quote, reproduce, or distribute without written approval from NewMilk.
Markets
• Maintain enough focus on your existing markets and clients
• Finding ways to bring your business to the next level from both ways.
NZ NewMilk Ltd. confidential. Do not circulate, quote, reproduce, or distribute without written approval from NewMilk.
Mature Market
NZ NewMilk Ltd. confidential. Do not circulate, quote, reproduce, or distribute without written approval from NewMilk.
Thank you for your timeany questions please?
NZ NewMilk Ltd. confidential. Do not circulate, quote, reproduce, or distribute without written approval from NewMilk.
NZ NewMilk Ltd. confidential. Do not circulate, quote, reproduce, or distribute without written approval from NewMilk.
Moderated by: Jonathan Watt
Chief Executive OfficerEasiyo Products Limited
Department of Internal AffairsConference
Opening Doors to China
• China will soon be NZ’s biggest trading partner.
• China has an insatiable demand for NZ Dairy products.
• Infant Formula, Milk commodities and ingredients are critical for NZ
exports.
• Yogurt demand is growing rapidly 23% YOY (off a relatively small base).
• Yakult success has fueled probiotic demand.
• Drinking yogurt outsells spoonable yogurt 2 : 1.
• Local yogurt is generally low quality (runny/sweet).
• Little or no imported yogurt due to weight / cost / expiry.
• Demand for probiotics, protein, calcium and taste is high.
• Easiyo has been selling in china for 4-5 years.
• There are 450 illegal Easiyo web sites now!
• Initially Easiyo had an “exclusivity” model.
• One Distributor for one country – exclusive.
• But for China, it is too big and complex.
• Sales were slow, although easy to manage.
• Milestones were either not set or not met.
• The Exclusivity model was adopted to;
• Several non exclusive distributors for China/ SE Asia.
• However infighting rampant over pricing + territory.
• Web specials are too transparent, lots of grief!
• Supervision and admin costs increased to referee fights.
• This model was further adapted in 2011/12.
• The new model we call the OEM matrix.
• Early days so far but we are happy with progress.
• Sales have increased 2-3 x with less supervision.
• Distributors are happy as rules are clear.
• Cash in advance, NZ $, FOB, TT or L/C, we manage export documents.
• Minimum 20ft FCL.
• So what is the OEM matrix?
OEM China Matrix City Province
Shanghai
Beijing
Lushen
Guangzhou
Tricom
Shanzen
Henan
Lushen Foods
So Chuan
Zhengjiang
Liao Ning
Baby
Supermarket
Internet
TV HomeShopping
Pharmacy
HFS
Cookware
Independents
Other
Rules we have insisted on;
•One square at a time e.g.: Shenzen/ Grocery.
•RRP’s encouraged at similar price e.g.: “RMB 60/sachet.
•Currently One Easiyo Branded Distributor although….
•Exclusivity contract expires in 2013.
•All other squares are OEM.
• OEM is unbranded Easiyo sachets and maker.
• Square “owner” does own branding / design in China.
• Design approved by Easiyo before stock made.
• Square owner investing in their brand not ours.
• Easiyo gets cash up front, milk volume, capacity.
• Also helps with make at home awareness in China.
• If square owner is troublesome we can stop supply.
• Easiyo control the IP as Westland Milk key specs.
• So far 4-5 squares occupied with 4.5 WIP.
• We only allow one owner per square.
• Most popular squares will go first.
Summary
• Easiyo has found this matrix works.
• It is not the long term goal as not brand focused.
• However in china for next 2-3 years is working as we build a war chest for
Easiyo brand investment.
• Other companies could adopt part of this model for themselves?
• Thanks for listening,
Good Luckwith your
Door to China!
Q + A