Chinese visit boosts Synlait

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A high-ranking Chinese Politburo figure's visit to a Canterbury milk factory is an invaluable endorsement for Synlait Milk in China, chief executive John Penno says.

The fourth-ranking leader of the country, Jia Qinglin, was shown around the Synlait Milk factory in Dunsandel on Wednesday as part of his four- day visit to New Zealand.
The Synlait Milk joint venture is a poster child of Chinese-New Zealand business co-operation, 51-per-cent- owned by publicly listed Shanghai company Bright Dairy, with the remainder owned by Kiwi-owned Synlait.
Bright is 60 per cent owned by a giant food and retail company that is owned by the Shanghai provincial government.
Penno said Jia was accompanied by a large group of Chinese media, which was perfectly timed for Synlait Milk's Canterbury Pure infant formula which went on Shanghai shelves in December retailing at almost $90 a kilogram.
The milk powder was pitched at high-end Chinese consumers in the US$10- billion infant-formula market and benefited from zero tariffing under the China- New Zealand Free Trade Agreement.
Jia was briefed on the Synlait Milk partnership, and shown around the milk factory which was expanded about six months ago at a cost of $100 million.
He was also taken to see a nearby farm which supplies Synlait.
High-level Bright Dairy executives flew from Shanghai to Canterbury for Jai's visit as well, which was an indication of how important it was in China, Penno said.
"One of the things we've learnt is this endorsement by senior party officials is very, very important to that [higher-end] market. Money can't buy the endorsement we got from having chairman Jia here today."
The Kiwi partners had learnt a lot from the Chinese partners who had also learnt things from working with New Zealanders, Penno said.
"We talk about them being Chinese and us being Kiwis, but really . . . good people from China are the same as good people from here. Trust is important, integrity is important and not letting people down."
Through translators, Jia said the free trade agreement and building relationships with quality food suppliers such as New Zealand was important to the Chinese.
Penno believed China would become a similar trading partner to what Britain was for Kiwi primary industries in the mid-20th century.
In the 1950s and 1960s, New Zealand became wealthy supplying wool and butter to the Britain; China could be that export market for New Zealand in the 21st century, he said.
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New Zealand was the first developed country to negotiate a free trade agreement with China, and exports to the country have tripled since the agreement was signed in 2008.
Jia is chairman of the Chinese People's Political Consultative Conference and visited New Zealand to celebrate the 40th anniversary of Kiwi-Chinese diplomacy.

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