Andrea Fox
Waikato dairy biotech company about to take step up with ‘woofie’ physical presence, writes
Doing business in China for six years taught Waikato dairy biotechnology company Quantec a textbook of lessons, now it’s taking that learning to the wire.
Quantec, which specialises in highvalue bioactives from natural products developed into proprietary ingredients for use in finished human and animal health applications, is moving from selling products in China to setting up shop there.
Following its own advice that a Kiwi company venturing into China should control its own destiny — which means avoiding joint ventures — Quantec has registered a “woofie”, business slang for a Wholly Foreignowned Enterprise (WFOE), one of just a few New Zealand dairy companies to do so.
A WFOE is a company established in China but wholly owned by one or more foreign investors. The WFOE’s job is to be Quantec in China.
Appointment of a general manager is imminent.
The Hangzhou-based WFOE will control distribution of Quantec’s IDP (immune defence proteins) patented and trademarked products, and launch its new Epiology brand treatment for acne. The IDP-based skin cream was successfully clinically trialled in the US in 2013.
Quantec executive chairman John Birch said the WFOE’s first job would be to “blue hat” IDP, meaning to achieve formal certification as a health food.
IDP is already sold in China by a Chinese national who buys the product from Quantec, but blue hat status is essential for the company to sell to hospitals and pharmacies.
The WFOE will soon employ staff and set up warehousing.
The groundwork for getting Quantec to this stage in China has been done by Birch and founder and managing director Dr Rod Claycomb.
The pair have been regular visitors to China over the years, “rolling up our sleeves, meeting people”.
“We’ve made mistakes and picked ourselves up again. There’s been a lot of organic learning,” said Birch.
One mistake was being seduced by the common notion it would easier to do business by having a Chinese partner.
Quantec’s joint venture (JV) lasted one board meeting. Conflict between the Chinese on the other side of the table couldn’t be resolved and given China’s mind-boggling requirement that director decisions must be unanimous, Claycomb and Birch feel extremely lucky common sense prevailed so they could exit, or they might still be negotiating a way out years on.
“Being involved in a JV can mean you’re a passenger in a culture you don’t understand,” Birch said.
“We’re starting to feel we’re walking. We’ve gone through the toddler stage, we understand the market pretty clearly. We’re developing deeper relationships which allow us to get very good professional advice.”
Quantec’s physical move into China was paved by forming a Hong