China: Is it the Tiger in the Room?

Prepared by: Kevin Quinlan Kim Wilson Kim Jones Supply Chain Manager General Manager OwnerMPC Gray Plantations Cropwatch

A Word of Thanks

• Horticulture Australia Limited for Funding, along with Cropwatch Independent Laboratories, Gray Plantations and MPC

• A very special thanks to Mr Lorin Young, Ms Chen, Mr Chang, Mr Li and Mr Xi for their time and hospitality.

A few China stats

• Population: 1,392,472,656

• Population Growth: 0.47% (159th in World)

Beijing - 21 million people

Shanghai – 23 million people

Guangxi – 46 million people

Guandong – 104 million people

Cities

Provinces

Cities

Provinces

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Current StatsProvince District No Trees Province

Tree No’sProduction

(tonnes)

Guangxi Fusui 400,000 400,000 400

Yunnan

Dehong 1,600,000

3,500,00 3,000

Lincang 1,000,000Dooshan 100,000Pu’er 200,000

Xishuangbanna 600,000

Total 3,900,00 3,400

Yunnan - Most trees less than 6 years old

Industry Expansion - Yunnan• Yunnan government is encouraging the planting

of macadamias and other selected crops - poverty relief

- reduce erosion on steep slopes

- Return to Forest

• Government subsidy - $4,500 RMB per hectare (approximately A$ 850/ha)

• Aim to have 50,000ha by 2020 (Aust 22,000ha)

• Estimate new plantings to be over 2 million trees per year until 2020

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Nurseries

• Nursery growth driven by Yunnan Government subsidy program

• Huge variability in tree quality

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Yunnan Macs Nursery

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Yunnan Macs – new Nursery seedbed

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Interesting grafting

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Guangxi

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Yunnan

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Mature Orchard

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Not all Smooth Sailing

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Processing

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Packing line

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Markets

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The china potential

• 11 Nov Online sale day in China – like Click Frenzy (Australia) and Black Friday (USA)

• This company sold 59t NIS on that day – all in small packs!

• Sales Value of macs for that day $8,000,000RMB (1,509,433 AUD)

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Conclusions

• No doubt rapid expansion

• Not without challenges – steep slopes, labour, pest and disease – will labour always be cheap?

• China market – lots of potential

• Most NIS consumed domestically

• 7 year advantage - Australia needs to continue to monitor the changes and react

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