Zespri set for huge season as China takes over
With thousands of kiwifruit in port and Prime Minister John Key in town, Zespri on Thursday launched what it says will be its biggest Chinese season yet.
The kiwifruit exporter expects China to overtake Japan as its largest market by volume this season, which runs until November. Zespri projects China to account for just over a fifth of its total sales this year, with sales of about 24 million trays.
This represents year-on-year growth of about 30 per cent, slightly downon 2015.
Zespri chief operating officer Simon Limmer said: ‘‘China has been growing at a phenomenal rate, with a 50 per cent increase in volume last year.
‘‘Most importantly, it’s going to become our most valuable market in the short term – this year or soon after. It’s going to be a value and volume market.’’
Europe and Japan continue as strong buyers, but China’s growing middle class is set to dominate sales.
The Bay of Plenty-based company has the sole rights to sell New Zealand kiwifruit outside of Australia or New Zealand.
Key attended the launch in Shanghai as part of a week-long trip around China.
‘‘China is Zespri’s largest market. I think that reflects the growth we see in the Chinese economy, and the size and scale of this economy,’’ Key said.
Key said Chinese President Xi Jingping served him Zespri kiwi- fruit at an official dinner on Tuesday, but joked that this almost caused a diplomatic incident.
‘‘He also served some Chinese gooseberries from Shaanxi province, but fortunately he didn’t ask me to judge which was the best.’’
In 2013 Zespri’s Chinese subsidiary was fined almost $1 million and an employee was jailed over the underpayment of customs duties on kiwifruit imports between 2008 and 2010.
The issue has been resolved in the Shanghai courts but a New Zealand Serious Fraud Office investigation continues.
Limmer said the company had made significant changes since then. ‘‘We have really strengthened our teams in China over the last few years, and in particular our relationships at the government level.’’
The company is now an ‘‘importer of record’’ in China, meaning it controls the entire importation process, as it does in Japan and Europe.
‘‘It gives us much greater control over our own destiny. It gives us greater agility and flexibility in the market, to adapt to market changes,’’ he said.
‘‘Previously a lot of our decisions were set in stone before the product left New Zealand, including price.’’
Zespri kiwifruit commands a premium in China of about 16 renminbi (NZ$3.50) a piece.
The new strategy includes partnerships with local fruit growers to test the viability of growing kiwifruit in China.
Zespri chief executive Lain Jager said: ‘‘We are excited about the potential of partnering with Chinese growers to supply the important domestic market season with Zespri-branded kiwifruit in the long term.’’