The concept of PCNZ was born out of the inaugural 2012 Te Hono Primary Sector Bootcamp, now Te Hono, held at Stanford University in the United States.
The founding companies include Sealord, Silver Fern Farms, Synlait Milk, Villa Maria Estate, Kono and Pacific Pace. Combined these companies represent approximately NZ$3.3 billion in exports for the New Zealand economy. They represent the following categories – wild caught seafood, free range beef, lamb and venison, infant formula and dairy based nutritional ingredients, sustainable wine production and marketing, farmed mussels and oysters, fruit leathers, apples and king salmon.
Identifying China as a key future market these founding companies elected to establish a New Zealand based entity to gain a better understanding of the complex Chinese market and facilitate easier access to China. Support and funding were provided both by the participants themselves and various government departments including New Zealand Trade and Enterprise.
PCNZ NZ (the New Zealand based entity) established a China services company known as Primary Collaboration New Zealand (Shanghai) Co. Ltd (PCNZ SHG) as a wholly foreign owned enterprise in Shanghai to provide ‘in-market’ services in the People’s Republic of China.
A common factor amongst the group is the control over the supply chain right back to the orchard, farm, quota or vineyard. This control guarantees supply to service international markets.
Staying true to due north
A range of business consultancy services are offered to clients including access to a central Shanghai office facilities, the ability to employ market managers to represent brands, administration and project management staff and opportunities to collaborate on promotional programmes.
Gaining market insights for lower cost and risk
Market knowledge is a valuable commodity in relation to the value chain and customers. As an innovative business model for New Zealand, PCNZ SHG lowers the cost and risk of entry to China. The concept enables clients to provide a higher level of contact and locally- based liaison with their respective importers, wholesalers and customers. Further, PCNZ SHG will grow relationships with Chinese authorities and New Zealand government agencies in China.
Establishing a structure and project delivery resources
A board of PCNZ has been established with one member from each of the founding partners, and a subcommittee was formed to oversee the establishment of PCNZ SHG. Throughout the establishment the clients have engaged a range of professional service companies to ensure a solid foundation for PCNZ SHG. These include legal, HR and accounting services.
Immediate priorities for the business will be on recruiting market and country managers to establish the processes and procedures to ensure that PCNZ SHG is compliant and effective in delivering its services. This includes the engagement of a range of service providers including payroll, accounting and travel.
A key focus for the future will also be to look at how clients can collaborate to leverage their individual capability to achieve results beyond what they would have achieved individually.
As it’s the clients who decide what services best suit their needs, these services will evolve over the next few years. The structure of the entity has been created to allow clients to enter PCNZ SHG and then if required graduate to establish their own Chinese entities – effectively using PCNZ SHG as a springboard into the Chinese market and fulfilling the ultimate goal of facilitating easier access into China and thereby unlocking the value of New Zealand’s primary sector.
ANZCO has now also joined the PCNZ initiative in Shanghai. "Being part of PCNZ gives us quick and proven access into the China market. In addition, collaborating and sharing information with other like-minded New Zealand businesses will be extremely valuable,” says Peter Conley, CE, ANZCO Foods.
K9 Natural has partnered with PCNZ to take on the pet food catregory in China. "Our K9 & Feline Natural brands have already developed strong reputations amongst Chinese pet owners largely from the work we have done in markets outside China. Joining PCNZ gives us a great platform to build on this inside China with an in-market presence making us much more responsive to the opportunities presented." says Neil Hinton CEO, Natural Food Group.
To ease primary sector entry into the China market.
“There is considerable value in sharing knowledge and resources and working together to create scale and share risk – both from New Zealand businesses combining and through strong partnerships with well-chosen Chinese entities.”
Chief Executive, NZTE, Peter Chrisp