Con­ap­role hopes to cash in on na­tion’s two-child pol­icy

Uruguayan dairy firm sees op­por­tu­ni­ties as big­ger fam­i­lies con­sume more milk

China Daily (USA) - - BUSINESS - By CAI XIAO caix­iao@chi­nadaily.com.cn

Uruguayan firm Con­ap­role, the largest ex­porter of dairy prod­ucts in South Amer­ica, will achieve an ex­port value of about $55 mil­lion this year in China as it ben­e­fits from the huge mar­ket and the na­tion’s two-child pol­icy, its se­nior ex­ec­u­tives said.

“We op­er­ate in more than 50 coun­tries, and China is the best one we can grow in be­cause of the huge de­mand there,” said Con­ap­role Pres­i­dent Al­varo Am­brois.

Am­brois said the firm’s ex­port value in China this year is ex­pected to be around $55 mil­lion, while last year it was $40 mil­lion.

“The Chi­nese mar­ket ac­counts for about 15 per­cent in Con­ap­role, and we be­lieve it will in­crease to 20 per­cent to 25 per­cent in five years,” said Am­brois.

Gas­ton Pescetto, Asia man­ager of Con­ap­role, said the two-child pol­icy will have a sig­nif­i­cant im­pact on the Chi­nese mar­ket be­cause the de­mand is in­creas­ing as fam­i­lies will con­sume more milk.

The two-child pol­icy will likely add an av­er­age of 2.5 mil­lion new­borns per year, un­leash­ing 75 bil­lion yuan ($11.1 bil­lion) in ad­di­tional con­sump­tion, said Liang Jianzhang, pro­fes­sor of economics at Pek­ing Univer­sity.

“Con­ap­role is in­creas­ing its sales in China and de­vel­op­ing the mar­ket by work­ing with lo­cal part­ners,” said Pescetto.

Con­ap­role is work­ing with more than 20 Chi­nese part­ners and the largest one is In­ner Mon­go­lia Yili In­dus­try Group Co.

“Wenowhave a rep­re­sen­ta­tive of­fice in China, and we are con­sid­er­ing set­ting up a branch here in four to five years and hir­ing tech­ni­cians to work with our lo­cal part­ners,” said Pescetto.

A GF Se­cu­ri­ties re­port said that Chi­nese cus­tomers are in­creas­ingly pay­ing at­ten­tion to high-qual­ity prod­ucts, and small and medium-sized cities are be­com­ing im­por­tant mar­kets.

Am­brois said a chal­lenge for Con­ap­role is thatUruguay and China have yet to sign a free trade agree­ment, so the tar­iffs are higher than for play­ers from coun­tries such as NewZealand.

YANG ZHENG / FOR CHINA DAILY

A sales­woman pro­motes im­ported milk pow­der at an im­ported goods fair in Kun­ming, Yun­nan prov­ince.

Al­varo Am­brois, pres­i­dent of Con­ap­role

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