What Does China's Emerging Superpower Status Mean for You?

April 1, 2006
China is a subject every businessman ought to get a handle on. So we at Food Processing have put together a webcast on the topic.

For some time, a lot of people in a lot of industries have been talking about China. But it seems the food industry has only recently discovered the emerging superpower. At first blush, what does China mean to you? New market? Competitor? Supplier? What are the implications of all three of those scenarios on your food company?

China has come up several times in my travels in the past couple of months. At the Grocery Manufacturers Assn.'s "The future of food" conference just before Christmas, China was the C in the acronym BRIC countries. Brazil, Russia, India and China (and one speaker suggested the addition of Turkey) were discussed as both up-and-coming markets and competitors.

In our own December issue, Tyson Foods Inc., our Processor of the Year, identified China as one of its biggest growth markets, if not the biggest. Reasons abound. The Chinese already are comfortable with chicken, although they could eat a lot more of it. As their incomes grow and refrigerators proliferate, they're eating more further-processed and convenient foods. And Western fast-food chains, such as Kentucky Fried Chicken and McDonald's, are growing in popularity. All are good signs for Tyson.

At the Northwest Food Processors Assn. meeting and expo in January, Gary Locke, former governor of Washington state and now a partner in law firm Davis Wright Tremaine, talked of the potential and pitfalls of setting up shop there.

And in interviewing executives from architectural, engineering and construction firms for the annual Capital Spending Outlook in this issue, several said they heard of projects in China. An engineer at one AEC wistfully said he knew of several large companies who were tying up significant chunks of their capital budgets on projects in China (projects his firm wasn't getting). CH2M Hill Lockwood Greene recently announced the company was issued a general contractor's license in China, enabling it to more directly service customers building there.

Wouldn't you love to have customers in China? But how do you feel about suppliers, both ingredient and equipment, from that country?

China is a subject every businessman ought to get a handle on. With that in mind, we at Food Processing have decided to put together a webcast on the topic. As we see it, you probably first need help with the basics. Is there opportunity there for your food company? What kind of a business structure do you need: simple representation, a joint venture with a Chinese firm or should you/can you own the enterprise? East West Associates can walk you through those first decisions; they've done it for many others. President Alex Bryant will be the first speaker.

What's it really like to set up shop over there? What are the pitfalls? There's nothing like hearing from somebody who's already done it. For those kinds of anecdotes we turn to James Rice, Tyson Foods Inc.'s vice president and general manager-Greater China.

And while discussion is important, you need to see some hard numbers on the infrastructure over there, tax liabilities and incentives, labor costs, etc. Grant Thornton LLC, kind of a partner of ours on a number of projects, will talk about all the financial considerations, as well as how to bring back here all that money you've made over there.

This webcast will set a pattern for those to follow. One of those points will be that while the webcast will have a premiere date, it also will be housed on our web site for a year. So you can tune in on the live date or listen in whenever it's most convenient for you. Another point that we'll try to make consistent: We'll try to keep them under 30 minutes.

Of course, you're invited. The date is May 23; click here to register.

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