chinese investment in australian citrus - a case study

Chinese investment in the Australian citrus industry - a case study

National Issues Forum

201328-29 October

Melbourne

China Trade Mission 201327 November – 6 December

Marketing Forum & Exporter Workshops

February 2014

Pilot Intern

program

Excellent product range

Australia’s reputation for safety, quality & reliability

Freshness

Excellent flavour

Beautiful colour

Good storage & shelf life

Food safety & traceability

When you buy Australian citrus you get:

Concerns in China over safetyof local food

MARCH 2013

Plague of 3,000 dead pigs dumped in river threatens Shanghai water supply

• Traditional wet markets

• Supermarkets

• Premium stores

• On-line selling

Market opportunities

Oranges• South Africa (Valencias)

• USA (late season navels)

• Domestic (early navels)

Mandarins• South Africa (Nova, Murcott)

• Argentina (Murcott)

• Domestic

The Competition

Taste is our biggest point of difference

Promoting Australian citrus in China

• Trade missions

• Trade fairs

• Generic on-line orin-store promotions

Australian citrus exports to China(metric tonnes)

2010 2011 2012 2013 20140

2,000

4,000

6,000

8,000

10,000

12,000Mandarins Oranges

• Lack of succession

• High debt levels

• Need to innovate

Why do Australian citrus businesses need investment?

Compliant and well developed supply chain• KCT orchard registration• Packing shed registration & inspections• MRL compliance – spray diary checks and residue tests• Minimum pricing regulation• Strong environmental safeguards - sustainability

What we can offer Chinese investors

Deregulated and fragmented marketing

• Single units are generally too small to be of interest– combine into larger managed units?

• Industry dominated by family-owned businesses– structures are often loose and complicated– consolidation options?

• Greenfields developments are possible– conversion to citrus from other crops?

• People, people, people!– capturing the IP; maintaining the passion– distributing the rewards; offering security

What are the key issues?

Mildura Fruit Company

Asian investment is already occurring

Super Seasons, Hillston

Asian investment is already occurring

AGRIFresh, Western Australia

Asian investment is already occurring

• Australian businesses need to prepare themselves

• Chinese investors need help in understanding the citrus industry

• There is a need for facilitators to help both sides

Neither side is ‘investment ready’

Thank you